Benson Company sells lamps and other lighting fixtures. The purchasing departmen

Question

Benson Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Benson’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 $79,000.

Required

Complete the inventory purchases budget by filling in the missing amounts.

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.

Req A

Req B and C

Complete the inventory purchases budget by filling in the missing amounts.

Req A

Req B and C

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.

Explanation / Answer

inventory Purchases budget Janauary February March budgeted cost of goods sold 54,000 58,000 64,000 176,000 plus:desired ending inventory 5,800 6,400 7,900 inventory needed 59,800 64,400 71,900 less:Beginning inventory 5,400 5,800 6,400 Required purchased on account 54,400 58,600 65,500 b. cost of goods sold 176,000 c ending inventory 7,900

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