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Jordan Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Jordans policy is to maintain an ending

Jordan Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Jordans policy is to maintain an ending inventory balance equal to 15 percent of the following months cost of goods sold. Aprils budgeted cost of goods sold is $80,000.

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 the inventory purchases budget by filling in the missing amounts.

    Inventory Purchases Budget
    January February March
    Budgeted cost of goods sold $57,000 $61,000 $67,000
    Plus: Desired ending inventory 9,150
    Inventory needed 66,150
    Less: Beginning inventory 8,550
    Required purchases (on account) $57,600

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