Question

Walton Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Walton'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. Req A Reg B and C Complete the inventory purchases budget by filling in the missing amounts. Inventory Purchases Budget January February Budgeted cost of goods sold $ 54,000 $ 58,000 Plus: Desired ending inventory 8,700 March $ 64,000

Answer 1

a) Inventory purchase budget

	January	February	march
Budgeted cost of goods sold	54000	58000	64000
Add: Desired ending inventory	8700	9600	11850
Inventory needed	62700	67600	75850
Less; Beginning inventory	8100	8700	9600
Required purchase	54600	58900	66250

b) Cost of goods sold = 54000+58000+64000 = 176000

c) Ending inventory = 11850