Baird Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget.

Baird Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Baird'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 $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.

Solutions

Expert Solution

Answer:-

a. Inventory Purchases Budget:-

	January	February	March
Budgeted Cost of Goods Sold	53,000	57,000	63,000
Plus: Desired Ending Inventory	5,700	6300 [63000*10/100]	7,900 [79000*10/100]
Inventory needed	58,700	63,300	70,900
Less: Beginning Inventory	5,300	5,700	6,300
Required Purchases (On Account)	53,400	57,600	64,600

b. Cost of Goods Sold in first quarter proforma income statement = 53000+57000+63000 = $ 173,000

c. Ending Inventory to be reported in proforma balance sheet at the end of first quarter = $ 7,900

Cost of Goods Sold	$ 173,000
Ending Inventory	$ 7,900

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Campbell Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget.

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 10 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...

Adams Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget.

Adams Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Adams'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 $83,000. 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...

Thornton Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory...

Thornton Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Thornton’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 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...

Rundle Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory...

Rundle Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Rundle’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 $83,000. 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...

Perez Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory...

Perez Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Perez’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 $78,000. Required Complete the inventory purchases budget by filling in the missing amounts. Inventory Purchases Budget January February March Budgeted cost of goods sold $53,000 $57,000 $63,000 Plus: Desired ending inventory 11,400 Inventory needed...

Hopkins Lighting Company is a wholesale lighting company that purchases lamps and resells them to retail...

Hopkins Lighting Company is a wholesale lighting company that purchases lamps and resells them to retail customers. Hopkins is beginning operations on October 1, 2019. Hopkins Lighting Company stocks three inventory items: desk lamps, table lamps, and floor lamps. Hopkins uses a perpetual inventory system. All expenses associated with the office are Administrative Expenses and all expenses associated with the wharehouse are selling expenses. Hopkinss has hired you to assist them regarding what inventory flow method to adopt. Hopkinss not...

Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are:...

Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are: September $ 350,000 October $ 500,000 November $ 400,000 Sales for August were $400,000 and December is estimated as $420,000. All sales are on account. Galaxy Lighting Company estimates that 80% of the accounts receivable are collected in the month of sale with the remaining 20% collected the following month. The units sell for $40 each. Generally, 60% of purchases are due and payable...

"Mankota Company’s purchasing manager, Fernando Garza, is preparing a purchases budget for the next quarter. At...

"Mankota Company’s purchasing manager, Fernando Garza, is preparing a purchases budget for the next quarter. At his request, Ruben Carpenter, the manager of the sales department, forwarded him the following preliminary sales budget: Preparing an inventory purchases budget and schedule of cash payments Budgeted sales October $240,000 November $300,000 December $360,000 January$320,00" "For budgeting purposes, Mankota estimates that cost of goods sold is 75 percent of sales. The company desires to maintain an ending inventory balance equal to 20 percent...

Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October...

Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 14,000 hours of productive capacity in the department: Variable overhead costs: Indirect factory labor $130,200 Power and light 6,300 Indirect materials 40,600 Total variable overhead cost $177,100 Fixed overhead costs: Supervisory salaries $61,990 Depreciation of plant and equipment 38,960 Insurance and property taxes 24,790 Total fixed overhead cost 125,740 Total factory overhead cost $302,840...

1. Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for...

1. Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 10,000 hours of productive capacity in the department: Variable overhead cost: Indirect factory labor $76,000 Power and light 4,000 Indirect materials 33,000 Total variable overhead cost $113,000 Fixed overhead cost: Supervisory salaries $39,550 Depreciation of plant and equipment 24,860 Insurance and property taxes 15,820 Total fixed overhead cost 80,230 Total factory overhead cost...

Subjects