Answer:
a. Inventory purchases budget for April, May, and June.
April May June
Budgeted Cost of Goods Sold $68,000 $78,000 $88,000
Plus Desired ending inventory $15,600 $17,600 $18,800
Inventory needed $83,600 $95,600 $106,800
Less: Beginning inventory ($3,900) ($15,600) ($17,600)
Required purchases $79,700 $80,000 $89,200
b. the amount of ending inventory Peabody will report on the end-of-quarter is $18,800
c. schedule of cash payments for inventory for April, May, and June.
April May June
Balance Brought Forward $15,500 $23,910 $24,000
Credit Purchases $79,700 $80,000 $89,200
Inventory needed $95,200 $103,910 $113,200
Payment of Current accounts ($55,790) ($56,000) ($62,440)
Payment of Previous accounts ($15,500) ($23,910) ($24,000)
Balance Carried Forward $23,910 $24,000 $26,800
d. the balance in accounts payable Peabody will report on the end-of-quarter is $26,800
Explanation:
First Prepare an Inventory purchase budget, then use the amounts for credit purchases to prepare the Trade Payable Budget (in this case - the schedule of Cash Payments for Inventory.
The Balances Remaining at the End of the Last Month of the Quarter for Inventory : $18,800 and Accounts Payable : $26,800 is the amount that will appear in the firm`s Balance Sheet for that quarter.