Spencer Company sells lamps and other lighting fodures. The purchasing departmen

Question

Spencer Company sells lamps and other lighting fodures. The purchasing department manager prepared the following inventory purchases budget. Spencer'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 $85,000 Required a. Complete the inventory purchases budget by filling in the missing amounts Budgeted cost of goods sold 54,000 58,000 64,000 Plus. Desired ending inventory5,800 Inventory needed Less Beginning inventory Requred purchases (on accoun $4 400 59,800 5,400 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 aft the end of the first quarter Type here to search

Explanation / Answer

Fill missing amount :

2) Budgeted cost of goods sold in income statment = (54000+58000+64000) = 176000

3) Ending inventory in balance sheet = 8500

January Febarury march Budgeted cost of goods sold 54000 58000 64000 Add: Desired ending inventory 5800 6400 8500 Total needs 59800 64400 72500 Less: Beginning inventory 5400 5800 6400 Required purchase (on account) 54400 58600 66100

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