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Super Shoes: prepare a cost of goods sold budget

Question 4

John Nguyen a retailer of Super Shoes has produced the following data:

Budgeted sales for $

January 2009 50,000
February 2009 45,000
March 2009 60,000
April 2009 70,000

- Shoes cost $3 a pair and are sold for $6 a pair
- Closing stock at 31/12/2008 was $12500
- Accounts Payable ( for purchase) at 31/12/2008 was $14,250
- Management now requires closing stock to be equal to 25% of the next month's sales (as from January 2009)

Required:

(a) Cost of goods sold budget for January to March 2009
(b) If purchases of stock are paid for 60% in the next month of purchase and 40% in the following month. How much did John pay the accounts payable in:

(1) January 2009
(2) February 2009
(3) March 2009

Solution Preview

Please see the attached file.

Budgeted Sales
Jan-09 $50,000.00
Feb-09 $45,000.00
Mar-09 $60,000.00
Apr-09 $70,000.00

Cost per pair $3.00
Selling Price per pair $6.00

Closing ...

Solution Summary

The following posting helps with problems involving cost of goods sold and accounts payable.

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