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 20 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. Answer is complete but not entirely correct. 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 $ 56,000 $ 60,000 $ 66,000 Plus: Desired ending inventory 12,000 13,200 14,000X Inventory needed 68,000 73,200 80,000 Less: Beginning inventory 11,200 12,000 13,200 Required purchases (on account) $ 56,800 $ 61,200 $ 66,800
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 20 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. Answer is complete but not entirely correct. 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 $ 56,000 $ 60,000 $ 66,000 Plus: Desired ending inventory 12,000 13,200 14,000X Inventory needed 68,000 73,200 80,000 Less: Beginning inventory 11,200 12,000 13,200 Required purchases (on account) $ 56,800 $ 61,200 $ 66,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text: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 20 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.
Answer is complete but not entirely correct.
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
$
56,000 $
60,000 $ 66,000
Plus: Desired ending inventory
12,000
13,200
14,000X
Inventory needed
68,000
73,200
80,000
Less: Beginning inventory
11,200
12,000
13,200
Required purchases (on account)
$
56,800 $ 61,200 $
66,800
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