Quesnon 4 (of 27) 4. Spencer Company sells lamps and other ighting fotures. The

Question

Quesnon 4 (of 27) 4. Spencer Company sells lamps and other ighting fotures. The purchasing department manager prepared the following imventory purchases budget Spencers policy is to maintain an ending inventory balance equal to 15 percent of the following month's cost of goods sold. April's budgeted cost of goods sold is $77,000 Required a. Complete the inventory purchases budget by filing in the missing amounts Inventory Purchases Budget March Budgeted cost of goods sold Plus Desired ending inventory 7,000 $61,000 $67,000 9.15010.060 66.15 71050 Less Beginning inventory 8,550 Requred purchases (om account)$7 Determine the amourne of cost of goods sold the company will seport on es first quarter pro forma income statement b. c. Determine the amoust of ending inventory the cempany will report on ts pro torma balance sheet at th end of the first quater Search the web and oe:)

Explanation / Answer

Inventory Purchase Budget January February March Budgeted cost of goods sold          57,000      61,000      67,000 Plus desired Inventory            9,150      10,050      11,550 Inventory needed          66,150      71,050      78,550 Less : Beginning inventory            8,550         9,150      10,050 Required purchase          57,600      61,900      68,500 Particulars Amount January      57,000 February      61,000 March      67,000 Total Cost of goods sold for quarter end    185,000 Particulars Amount Aprils cost of goods sold       77,000 Desired Invenory 15.0% Closing Invetory    11,550.0

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