Coomb’s Fashions forecasts sales of $141,000 for the quarter ended December 31. Its gross profit rate is 20% of sales, and its September 30 inventory is $40,500. If the December 31 inventory is targeted at $49,500, budgeted purchases for this quarter should be:

See below

Explanation:

Given that;

September 30 inventory = $40,500

December 31 inventory = $49,500

Let x be the budgeted purchases for this quarter.

We can now calculate the budgeted purchases for this quarter by using the formula below;

Required December 31 inventory = September 30 inventory + x - Cost of goods sold

Where cost of goods sold = $141,000 × 0.8

So, by putting the values, we'll have

$49,500 = $40,500 + x - $141,000 × 0.8

$49,500 = $40,500 + x - $112,800

x = $49,500 - $40,500 - $112,800

x = $121,800

Therefore, budgeted purchases for the next quarter should be $121,800

statement of owner's equity;

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.