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Accounting | Accounting homework help

Paper Details

Sorensen Corporation has provided the following information is provided for the March operating budget:
Budgeted sales for March $100,000 and April $200,000
Collections for sales are 60% in the month of sale and 40% the next month.
Gross margin is 30% of sales
Administrative costs are $10,000 each month.
Beginning accounts receivable (March 1) $20,000
Beginning inventory (March 1) $14,000
Beginning accounts payable (March 1) $60,000 (All from inventory purchases)
Purchases are paid in full the following month.
Desired ending inventory is 20% of the next month is cost of goods sold (COGS)
No loans are outstanding on March 1.

For March, what are the budgeted purchases of inventory?

Solution:

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