Tremont, Inc., sells tire rims. Its sales budget for the nine months ended September 30 follows: In
Question:
In the past, cost of goods sold has been 40% of total sales. The director of marketing and the financial vice president agree that each quarters ending inventory should not be below $20,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $220,000 during the fourth quarter. The January 1 inventory was $32,000.
Requirement
1. Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine monthperiod.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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