Question

Campbell Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Campbell'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 $79,000. 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. Reg A Req B and C Complete the inventory purchases budget by filling in the missing amounts, March $ 64,000 Inventory Purchases Budget January February Budgeted cost of goods sold $ 54,000 $ 58,000 Plus: Desired ending inventory 11,600 Inventory needed 65,6001 Less: Beginning inventory 10.800 Required purchases on account) $ 54,800 Red Band >

Answer 1

a.

Inventory Purchases Budget
	January	February	March
Budgeted cost of goods sold	54,000	58,000	64,000
Plus: Desired ending inventory	11,600	12,800	15,800
Inventory needed	65,600	70,800	79,800
Less: Beginning inventory	10,800	11,600	12,800
Required purchase ( on account)	$54,800	59,200	67,000

b. Cost of goods sold = Budgeted cost of goods sold for January +Budgeted cost of goods sold for February +Budgeted cost of goods sold for March

= 54,000+58,000+64,000

= $176,000

b.	Cost of goods sold	$176,000
c.	Ending Inventory	$15,800

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