Perez Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases
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Question:
Perez Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Perez’s policy is to maintain an ending inventory balance equal to 10 percent of the following month’s cost of goods sold. April’s budgeted cost of goods sold is $78,000.
Required
Complete the inventory purchases budget by filling in the missing amounts.
Inventory Purchases Budget January February March Budgeted cost of goods sold $58,000 $62,000 $68,000 Plus: Desired ending inventory 6,200 Inventory needed 64,200 Less: Beginning inventory 5,800 Required purchases (on account) $58,400 Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement.
Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.
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