Question

Jasper Fruits Corporation wholesales peaches and oranges. Barbara Jasper is working with the company's accountant to prepare next year's budget. Ms. Jasper estimates that sales will increase 4 percent for peaches and 9 percent for oranges. The current year's sales revenue data follow. First Second Third Fourth Quarter $247,000 Quarter $227,000 414,000 Quarter Quarter $307,000 Total Peaches $247,000 464,000 $1,028,000 1,856,000 Oranges 584,000 394,000 $641,000 $711,000 $891,000 $641,000 $2,884,000 Total Based on the company's past experience, cost of goods sold is usually 70 percent of sales revenue. Company policy is to keep 15 percent of the next period's estimated cost of goods sold as the current period's ending inventory. (Hint Use the cost of goods sold for the first quarter to determine the beginning inventory for the first quarter) Required a. Prepare the company's sales budget for the next year for each quarter by individual product. b. If the selling and administrative expenses are estimated to be $620,000, prepare the company's budgeted annual income statement. c. Ms. Jasper estimates next year's ending inventory will be $35,600 for peaches and $57,600 for oranges. Prepare the company's inventory purchases budgets for the next year, showing quarterly figures by product. Complete this question by entering your answers in the tabs below. Required B Required C2 Required A Required C1 Prepare the company's sales budget for the next year for each quarter by individual product. Fourth Quarter Second Quarter First Quarter Third Quarter Total Peaches Oranges Total <Required A Required B

Answer 1

Sales budget
	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Total
Peaches	$     236,080	$ 256,880	$       319,280	$      256,880	$    1,069,120
Oranges	$     451,260	$ 505,760	$       636,560	$      429,460	$    2,023,040
Total	$     687,340	$ 762,640	$       955,840	$      686,340	$    3,092,160

Budgeted Income Statement
Sales Revenue	$ 3,092,160
Cost of Goods Sold @70%	$ 2,164,512
Gross Profit	$     927,648
Selling and Administrative expenses	$     620,000
Operating Income	$     307,648

Purchase Budget (Peaches)
	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Total
Peaches	$     236,080	$ 256,880	$       319,280	$      256,880
Cost of Goods Sold @70%	$     165,256	$ 179,816	$       223,496	$      179,816
Add : Desired Ending Inventory	$        26,972	$    33,524	$         26,972	$         35,600
Cost of Goods Required	$     192,228	$ 213,340	$       250,468	$      215,416
Less Beginning Inventory	$        24,788	$    26,972	$         33,524	$         26,972
Purchase Cost	$     167,440	$ 186,368	$       216,944	$      188,444	$        759,196

Desired Ending Inventory is 15% of next quarter sales requirements
Beginning Inventory is 15% of current quarter sales requirements

Purchase Budget (Oranges)
	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Total
Oranges Sales	$     451,260	$ 505,760	$       636,560	$      429,460
Cost of Goods Sold @70%	$     315,882	$ 354,032	$       445,592	$      300,622
Add : Desired Ending Inventory	$        53,105	$    66,839	$         45,093	$         57,600
Cost of Goods Required	$     368,987	$ 420,871	$       490,685	$      358,222
Less Beginning Inventory	$        47,382	$    53,105	$         66,839	$         45,093
Purchase Cost	$     321,605	$ 367,766	$       423,846	$      313,129	$    1,426,346

Desired Ending Inventory is 15% of next quarter sales requirements
Beginning Inventory is 15% of current quarter sales requirements