Exercise 7-7A Preparing an inventory purchases budg Lumpkin Company sells lamps and other lighting fixtures. The purchasing department manager pre- pared the following inventory purchases budget. Lumpkin'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 $40,000. Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory Required purchases (on account) January $30,000 3,200 33,200 6,000 $27,200 February $32,000 March $35,000 ? Planning for Profie Required 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.
Exercise 7-7A Preparing an inventory purchases budg Lumpkin Company sells lamps and other lighting fixtures. The purchasing department manager pre- pared the following inventory purchases budget. Lumpkin'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 $40,000. Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory Required purchases (on account) January $30,000 3,200 33,200 6,000 $27,200 February $32,000 March $35,000 ? Planning for Profie Required 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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