Question

The purchasing department manager for Jordan Company prepared the following supplies purchases budget. Jordan's policy is to maintain an ending supplies balance equal to 10 percent of the following month's supplies expense. April's budgeted supplies expense is $84,000 Required a. Complete the supplies purchases budget by filling in the missing amounts b. Determine the amount of supplies expense the company will report on its first quarter pro forma income statement c. Determine the amount of ending supplies 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 Red Band Complete the supplies purchases budget by filling in the missing amounts. Supplies Purchases and January February 559 0 53000 March 5900

Answer 1

• Requirement A

	January	February	March
Budgeted supplies expense	$59,000	$63,000	$69,000
Plus: Desired ending supplies	$6,300	$6,900	$8,400
Supplies needed	$65,300	$69,900	$77,400
Less: Beginning supplies	$5,900	$6,300	$6,900
Required purchases (on account)	$59,400	$63,600	$70,500

--Working

	January	February	March
Budgeted supplies expense	59000	63000	69000
Plus: Desired ending supplies	=63000*10%	=69000*10%	=84000*10%
Supplies needed	=59000+6300	=63000+6900	=69000+8400
Less: Beginning supplies	=59000*10%	=63000*10%	=69000*10%
Required purchases (on account)	=65300-5900	=69900-6300	=77400-6900

• Requirement B and C
  [b] Supplies expense = 59000 + 63000 + 69000 = $ 191,000
  [c] Ending supplies = $ 8400