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Zeller Company estimates that 2020 sales will be $40,600 in quarter 1, $52,700 in quarter 2, and $67,000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 20% of the next quarter's expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2020.

Zeller Company estimates that 2020 sales will be $40,600 in quarter 1, $52,700 in quarter 2, and $67,000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 20% of the next quarter's expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2020.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Zeller Company estimates that 2020 sales will be $40,600 in quarter 1, $52,700 in quarter 2, and $67,000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 20% of the next quarter's expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2020.
Transcribed Image Text:Zeller Company estimates that 2020 sales will be $40,600 in quarter 1, $52,700 in quarter 2, and $67,000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 20% of the next quarter's expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2020.
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