Dickey Books accountant prepared the following schedule of c

Dickey Books\' accountant prepared the following schedule of cash payments for inventory purchases. Dickey Books\' suppliers require that 90 percent of purchases on account be paid in the month of purchase; the remaining 10 percent are paid in the month following the month of purchase. Required a. Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. b. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter. Complete this question by entering your answers in the tabs below Required ARequired Complete the schedule of cash payments for inventory purchases by filling in the missing a Schedule of Cash Payments for Inventory Purchases May 72,000 April June Payment for current accounts payable Payment for previous accounts payable Total budgeted payments for inventory 63,000 4,000 tor67.000 Required A Required B>

Solution

a.

Schedule of Cash payments for Inventory purchases

April

May

June

Payment for current accounts payable

$ 63,000.00

$ 72,000.00

($95,000*90%)

$ 85,500.00

Payment for previous accounts payable

$ 4,000.00

($63,000*10%/90%)

$ 7,000.00

($72,000*10%/90%)

$ 8,000.00

Total budgeted payments for inventory

$ 67,000.00

$ 79,000.00

$ 93,500.00

b.

Amount of accounts payable = June sales * 10% = $95,000 * 10% = $9,500

Schedule of Cash payments for Inventory purchases
	April	May	June
Payment for current accounts payable		$ 63,000.00		$ 72,000.00	($95,000*90%)	$ 85,500.00
Payment for previous accounts payable		$ 4,000.00	($63,000*10%/90%)	$ 7,000.00	($72,000*10%/90%)	$ 8,000.00
Total budgeted payments for inventory		$ 67,000.00		$ 79,000.00		$ 93,500.00