Raw material purchases are paid as follows: 50% in the month of the purchase, 30%...
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Accounting
- Raw material purchases are paid as follows: 50% in the month of the purchase, 30% the month after the purchase, and 20% in the second month following the purchase. The raw materials budget is as follows:
| PROJECTED | Oct | Nov | Dec | TOTAL QTR |
| RAW MATERIAL PURCHASES |
| |||
|
| ||||
| NEEDED FOR SALES | $34,503 | $48,304 | $55,205 | $138,012 |
| DESIRED ENDING | 8,626 | 12,076 | 13,801 |
|
| LESS: BEGINNING | (40,800) | (8,626) | (12,076) |
|
| PURCHASES | $2,329 | $51,755 | $56,930 | $111,013 |
| Inventory Data: | 1-Oct |
| 31-Dec |
|
|
|
|
|
|
|
| Raw Materials | $40,800 | $66,780 | ||
| Work-in-Process | 84,000 | 75,600 | ||
| Finished Goods | 144,000 | 129,600 |
Question #1: Based on the above information,
- Prepare a schedule of payment for raw materials for each month of the 4th quarter. Previous months credit (on account) purchases are: November 2020 purchases on account, $56,560 December 2020 purchases on account, $52,800
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