Question

Zachary Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Zachary'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 $85,000 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 Req B and C Complete the inventory purchases budget by filling in the missing amounts. Inventory Purchases Budget February January March $ $ $ Budgeted cost of goods sold 57,000 61,000 67,000 Plus: Desired ending inventory 6,100 Inventory needed 63,100 Less: Beginning inventory 5,700 $ 57,400 Required purchases (on account)

Answer 1

1)		Inventory Purchase Budget
				Jan	Feb	March
	Budgeted cost of goods sold			57,000	61,000	67,000
	Add:ending inventory			6100	6700	8500
	total needs			63,100	67,700	75,500
	less:Beginning inventory			5,700	6,100	6,700
	purchases required			57,400	61,600	68,800
b	cost of goods sold			185,000
c	Ending inventory			8500