Jasper Fruits Corporation wholesales peaches and oranges.Barbara Jasper is working with the company’s accountant to preparenext year’s budget. Ms. Jasper estimates that sales will increase 7percent for peaches and 12 percent for oranges. The current year’ssales revenue data follow:

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
Peaches	$	228,000		$	248,000		$	308,000		$	248,000		$	1,032,000
Oranges		412,000			462,000			582,000			392,000			1,848,000
Total	$	640,000		$	710,000		$	890,000		$	640,000		$	2,880,000

Based on the company’s past experience, cost of goods sold isusually 65 percent of sales revenue. Company policy is to keep 20percent of the next period’s estimated cost of goods sold as thecurrent period’s ending inventory. (Hint: Use the cost ofgoods sold for the first quarter to determine the beginninginventory for the first quarter.)

Required

1. Prepare the company’s sales budget for the next year for eachquarter by individual product.

2. If the selling and administrative expenses are estimated to be$680,000, prepare the company’s budgeted annual incomestatement.

3. Ms.Jasper estimates next year’s ending inventory will be $34,100for peaches and $56,500 for oranges. Prepare the company’sinventory purchases budgets for the next year, showing quarterlyfigures by product

a

First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Total
Peaches	not attempted	not attempted	not attempted	not attempted	$0
Oranges	not attempted	not attempted	not attempted	not attempted	$0
Total	$0	$0	$0	$0	$0

b

JASPER FRUITS CORPORATION
Budgeted Annual Income Statement
Sales revenue	not attempted
Cost of goods sold	not attempted
Gross profit	0
	not attempted
Net income	$0

c

First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Salesselected answer correct	not attempted	not attempted	not attempted	not attempted
Cost of goods soldselected answercorrect	not attempted	not attempted	not attempted	not attempted
Plus: Desired ending inventoryselectedanswer correct	not attempted	not attempted	not attempted	not attempted
Inventory needed	0	0	0	0
Less: Beginning inventoryselectedanswer correct	not attempted	not attempted	not attempted	not attempted
Required purchases	$0	$0	$0	$0

c2

First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Sales	not attempted	not attempted	not attempted	not attempted
Cost of goods sold	not attempted	not attempted	not attempted	not attempted
Plus: Desired ending invent	not attempted	not attempted	not attempted	not attempted
Inventory needed	0	0	0	0
Less: Beginning inventory	not attempted	not attempted	not attempted	not attempted
Required purchases	$0	$0	$0	$0