Chapter 14, Problem 7E

Exercise 7-7A Preparing an inventory purchases budget

 Lumpkin Company sells lamps and other lighting fixtures. The purchasing department manager prepared 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.

Required

1. a. Complete the inventory purchases budget by tilling in the missing amounts.
2. b. Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement.
3. c. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.