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 15 percent of the following month's cost of goods sold. April's budgeted cost of goods sold is $79,000. 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. Reg A Req B and C Complete the inventory purchases budget by filling in the missing amounts. February $ 62,000 March $ 68,000 Inventory Purchases Budget January Budgeted cost of goods sold $ 58,000 Plus: Desired ending inventory 9.300 Inventory needed 67,300 Less: Beginning inventory 8,700 Required purchases (on account) $ 58,600

Answer 1

Requirement a

Inventory purchase budget
	Quarter ended
	January	February	March
Cost of goods sold	$          58,000	$          62,000	$             68,000
Plus: Desired ending inventory	$            9,300	$          10,200	$             11,850*
Total Inventory required	$          67,300	$          72,200	$             79,850
Less: Beginning inventory	$            8,700	$             9,300	$             10,200
Purchases	$          58,600	$          62,900	$             69,650

*79000 x 15%

.

Requirement b and c

b.	Cost of goods sold	$     188,000.00
c.	Ending Inventory	$       11,850.00

Cost of goods sold is sum total of Cost of goods sold for January till march

Ending inventory is ending inventory of march.