Sentra Sporting Company sells tennis rackets and other sporting equipment. The p

Question

Sentra Sporting Company sells tennis rackets and other sporting equipment. The purchasing department manager prepared the inventory purchases budget. Sentra's policy is to maintain an ending inventory balance equal to 15% of the following month's cost of goods sold. January's budgeted cost of goods sold is $70,000. October November December of Goods Sold60,000 40,80e 58,ee Plus: Desired Ending Inventory6,988 66,000 9,000 Required purchases (on account) 57,00e Inventory Needed Less: Beginning Inventory What is the amount of ending inventory that the company will report on its pro forma balance sheet? Multiple Choice $395.300 $10,500 $7,500 $60,500

Explanation / Answer

Ending Inventory that the company will report on its proforma is $ 10500

Therefore, the right answer is option (b) $ 10500

Particulars October November December Budgeted Cost of Goods sold 60000 40000 50000 Plus: Desired Ending Inventory 6000 7500 10500 50000*15% 70000*15% Inventory Needed 66000 47500 60500 Less: Beginning Inventory 9000 6000 7500 Required Purchases (on Account) 57000 41500 53000

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