Exercise 14-7A (Algo) Preparing an inventory purchases budget LO 14-3

Franklin Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Franklins policy is to maintain an ending inventory balance equal to 10 percent of the following months cost of goods sold. Aprils budgeted cost of goods sold is $81,000.

Required

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.

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	$51,000	$55,000	$61,000
	5,500
Inventory needed	56,500
	5,100
Required purchases (on account)	$51,400

Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement.Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.

b.	Cost of goods sold
c.	Ending inventory