Zeller Company estimates that 2017 sales will be $40,000 in quarter 1, $48,000 in quarter 2, and $58,000 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 10% of the next quarter’s expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2017.

$10,000

Explanation:

Given:

Total shares = 1,000

Value of shares = 5%, $100 par value

Now,

The annual preferred dividend = $5 × 1,000

or

The annual preferred dividend = $5,000

Therefore,

The dividends in arrears on December 31,2016 was $5,000

Hence,

The 2017 preferred dividends would be

=  dividends in arrears on December 31,2016 + Dividends for 2017

= $5,000 + $5,000

= $10,000