Munoz Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Munoz’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 $76,000. Required Complete the inventory purchases budget by filling in the missing amounts. Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.         Inventory Purchases Budget   January February March Budgeted cost of goods sold $60,000 $64,000 $70,000   6,400     Inventory needed 66,400       6,000     Required purchases (on account) $60,400     Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.           b. Cost of goods sold   c. Ending inventory

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Munoz Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Munoz’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 $76,000.

Required

  1. Complete the inventory purchases budget by filling in the missing amounts.

  2. Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement.

  3. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.

     
     
     
     
    Inventory Purchases Budget
      January February March
    Budgeted cost of goods sold $60,000 $64,000 $70,000
      6,400    
    Inventory needed 66,400    
      6,000    
    Required purchases (on account) $60,400    

    Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.

     
     
     
     
     
    b. Cost of goods sold  
    c. Ending inventory  
     
    •  
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