Rundle Company sells lamps and other lighting fixtures. The purchasing departmen
ID: 2542883 • Letter: R
Question
Rundle Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Rundle'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 $76,000 Required a. Complete the inventory purchases budget by filling in the missing amounts b. Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement. c. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter Complete this question by entering your answers in the tabs below Req A Req B and C Complete the inventory purchases budget by filling in the missing amounts Inventory Purchases Budget JanuaryFe $ 58,000 $ 62,000 $ 68,000 bruary March Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory Required purchases (on account) $58,400 6,200 64,200 5,800Explanation / Answer
a. Inventory Purchase Budget January February March April A Budgeted cost of goods sold $58,000 $62,000 $68,000 $76,000 B Plus desired ending inventory $6,200 $6,800 $7,600 C=A+B Inventory needed $64,200 $68,800 $75,600 D Less: Beginning inventory $5,800 $6,200 $6,800 E=C-D Required purchase(On accpount) $58,400 $62,600 $68,800 Ending Inventory in January $6,200 (0.1*62000) Ending Inventory in Frbruary $6,800 (0.1*68000) Ending Inventory in March $7,600 0.1*760000 Beginning Inventory in February= Ending Inventory in January $6,200 Beginning Inventory in March= Ending Inventory in Frbruary $6,800 b Amount of cost of goods sold in the quarter $188,000 (58000+62000+68000) c Amount of Ending Inventory for the quarter $7,600
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