(Solved by Humans)-Problem 14-17 Preparing an inventory purchases budget and schedule of cash payments Spratt Inc....

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Problem 14-17       Preparing an inventory purchases budget and schedule of cash payments Spratt Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget for April, May, June, and  July.     April May June July Budgeted cost of goods sold $60,000 $70,000 $80,000 $86,000       Salary expense July $18,000 August $18,000 September $18,000           Sales commissions (4 percent of sales) 1,700 1,700 1,700 Supplies expense 360 390 420 Utilities 1,100 1,100 1,100 Depreciation on store equipment 3,000 3,000 3,000 Rent 6,600 6,600 6,600 Miscellaneous        690        690        690 Total S&A expenses before interest $31,450 $31,480 $31,510 Spratt had a beginning inventory balance of $3,600 on April 1 and a beginning balance in accounts payable of $14,800. The company desires to maintain an ending inventory balance equal to 10 percent of the next period’s cost of goods sold. Spratt makes all purchases on ac- count. The company pays 60 percent of accounts payable in the month of purchase and the re- maining 40 percent in the month following purchase. Required a.     Prepare an inventory purchases budget for April, May, and June. b.     Determine the amount of ending inventory Spratt will report on the end-of-quarter pro forma balance sheet. c.     Prepare a schedule of cash payments for inventory for April, May, and June. d.     Determine the balance in accounts payable Spratt will report on the end-of-quarter pro forma balance sheet.