Having an issue figuring out the ending inventory. Thank you ### Inventory Purchases Budget Analysis — Vernon Company#### Overview:Vernon Company specializes in selling lamps and other lighting fixtures. To manage its inventory efficiently, the company’s purchasing department manager has devised the following inventory purchases budget. According to company policy, the ending inventory must be kept at 15 percent of the following month's budgeted cost of goods sold, which is $84,000 for April.#### Required Tasks:1. **Complete the Inventory Purchases Budget**: Fill in the missing amounts in the budget.2. **Determine the Cost of Goods Sold**: Report the amount on the first quarter pro forma income statement.3. **Determine the Ending Inventory**: Report the amount on the pro forma balance sheet at the end of the first quarter.#### Interactive Components:- **Tabs Navigation**: - `Req A` - `Req B and C`#### Tasks Detail:**a. Complete the Inventory Purchases Budget**: Click the tab labeled "Req A" to input the missing amounts in the inventory budget.**b. Cost of Goods Sold Determination**:- The cost of goods sold (COGS) is provided: **$170,000**. **c. Ending Inventory Calculation**:- You need to compute and input the ending inventory figure.#### Step-by-Step Instructions:Navigate through the tabs to input your answers accordingly. Ensure to calculate and validate each required figure based on the given data and policy requirements.#### Budget Figures (Interactive Table):| Requirement | Description | Amount ||-------------|-----------------------------------------|------------|| b. | Cost of goods sold | $170,000 || c. | Ending inventory | (Input) |#### Visual Aid:- **Tabs Description**: - `Req A`: Focuses on completing the missing amounts in the inventory purchases budget. - `Req B and C`: Guides you to enter the amounts for cost of goods sold and ending inventory on respective financial statements.Click the `Req A` and `Req B and C` tabs to input and verify your answers.### Additional Resources- **eBook**: Access for further reading and examples.- **Hint**: Guidance for calculations.- **Print**: Option to print the budget for offline calculations and verification.Ensure to verify your inputs before submission for accuracy. Happy budgeting! **Vernon Company Inventory Purchases Budget Analysis**Vernon Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Vernon’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 $84,000.### Required Tasks: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 BudgetThe table below shows the budgeted cost of goods sold for the first quarter (January through March) along with the calculations needed to determine the required purchases on account:| Inventory Purchases Budget | January | February | March ||----------------------------|---------|----------|-------|| Budgeted cost of goods sold | $52,000 | $56,000 | $62,000 || **Plus: Desired ending inventory** | $8,400 | $9,300 | $12,600 || **Inventory needed** | $60,400 | $65,300 | $74,600 || **Less: Beginning inventory** | $7,800 | $8,400 | $9,300 || **Required purchases (on account)**| $52,600 | $56,900 | $65,300 |Below is a breakdown of the key elements:- **Budgeted Cost of Goods Sold:** The estimated amount Vernon Company expects to spend on goods sold in each month.- **Desired Ending Inventory:** 15% of the following month's budgeted cost of goods sold.- **Inventory Needed:** The total inventory required for the month, which is the sum of budgeted cost of goods sold and desired ending inventory.- **Beginning Inventory:** The inventory carried over from the previous month.- **Required Purchases (On Account):** The amount Vernon Company needs to purchase to meet the inventory requirements, calculated by subtracting beginning inventory from inventory needed.### Instructions for Students1. **To Complete the Inventory Purchases Budget:** - Fill in the desired ending inventory for each month by calculating 15

Name: Having an issue figuring out the ending inventory. Thank you ### Inven
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Description: Having an issue figuring out the ending inventory. Thank you ### Inventory Purchases Budget Analysis — Vernon Company#### Overview:Vernon Company specializes in selling lamps and other lighting fixtures. To manage its inventory efficiently, the compa

It is given in the question that ending inventory is 15 % of the following months of cost of goods…

Business

Accounting

Vernon Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Vernon'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 $84,000. 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 January February March Budgeted cost of goods sold Plus: Desired ending inventory $ 52,000 $ 56,000 $ 62,000 12,600 74,600 9,300 $ 52,600 $ 56,900 $ 65,300 8,400 9,300 Inventory needed 60,400 65,300 Less: Beginning inventory Required purchases (on account) 7,800 8,400

Vernon Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Vernon'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 $84,000. 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 January February March Budgeted cost of goods sold Plus: Desired ending inventory $ 52,000 $ 56,000 $ 62,000 12,600 74,600 9,300 $ 52,600 $ 56,900 $ 65,300 8,400 9,300 Inventory needed 60,400 65,300 Less: Beginning inventory Required purchases (on account) 7,800 8,400

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

Topic Video

Question

Having an issue figuring out the ending inventory.

Thank you

### Inventory Purchases Budget Analysis — Vernon Company

#### Overview:
Vernon Company specializes in selling lamps and other lighting fixtures. To manage its inventory efficiently, the company’s purchasing department manager has devised the following inventory purchases budget. According to company policy, the ending inventory must be kept at 15 percent of the following month's budgeted cost of goods sold, which is $84,000 for April.

#### Required Tasks:

1. **Complete the Inventory Purchases Budget**: Fill in the missing amounts in the budget.
2. **Determine the Cost of Goods Sold**: Report the amount on the first quarter pro forma income statement.
3. **Determine the Ending Inventory**: Report the amount on the pro forma balance sheet at the end of the first quarter.

#### Interactive Components:
- **Tabs Navigation**:
- `Req A`
- `Req B and C`

#### Tasks Detail:
**a. Complete the Inventory Purchases Budget**: Click the tab labeled "Req A" to input the missing amounts in the inventory budget.

**b. Cost of Goods Sold Determination**:
- The cost of goods sold (COGS) is provided: **$170,000**.

**c. Ending Inventory Calculation**:
- You need to compute and input the ending inventory figure.

#### Step-by-Step Instructions:
Navigate through the tabs to input your answers accordingly. Ensure to calculate and validate each required figure based on the given data and policy requirements.

#### Budget Figures (Interactive Table):

| Requirement | Description | Amount |
|-------------|-----------------------------------------|------------|
| b. | Cost of goods sold | $170,000 |
| c. | Ending inventory | (Input) |

#### Visual Aid:
- **Tabs Description**:
- `Req A`: Focuses on completing the missing amounts in the inventory purchases budget.
- `Req B and C`: Guides you to enter the amounts for cost of goods sold and ending inventory on respective financial statements.

Click the `Req A` and `Req B and C` tabs to input and verify your answers.

### Additional Resources
- **eBook**: Access for further reading and examples.
- **Hint**: Guidance for calculations.
- **Print**: Option to print the budget for offline calculations and verification.

Ensure to verify your inputs before submission for accuracy. Happy budgeting!

**Vernon Company Inventory Purchases Budget Analysis**

Vernon Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Vernon’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 $84,000.

### Required Tasks:
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

The table below shows the budgeted cost of goods sold for the first quarter (January through March) along with the calculations needed to determine the required purchases on account:

| Inventory Purchases Budget | January | February | March |
|----------------------------|---------|----------|-------|
| Budgeted cost of goods sold | $52,000 | $56,000 | $62,000 |
| **Plus: Desired ending inventory** | $8,400 | $9,300 | $12,600 |
| **Inventory needed** | $60,400 | $65,300 | $74,600 |
| **Less: Beginning inventory** | $7,800 | $8,400 | $9,300 |
| **Required purchases (on account)**| $52,600 | $56,900 | $65,300 |

Below is a breakdown of the key elements:

- **Budgeted Cost of Goods Sold:** The estimated amount Vernon Company expects to spend on goods sold in each month.
- **Desired Ending Inventory:** 15% of the following month's budgeted cost of goods sold.
- **Inventory Needed:** The total inventory required for the month, which is the sum of budgeted cost of goods sold and desired ending inventory.
- **Beginning Inventory:** The inventory carried over from the previous month.
- **Required Purchases (On Account):** The amount Vernon Company needs to purchase to meet the inventory requirements, calculated by subtracting beginning inventory from inventory needed.

### Instructions for Students

1. **To Complete the Inventory Purchases Budget:**
- Fill in the desired ending inventory for each month by calculating 15

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