Perez Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Perezs 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 $78,000.

Required

1. Complete the inventory purchases budget by filling in the missing amounts.

   Inventory Purchases Budget
   	January	February	March
   Budgeted cost of goods sold	$58,000	$62,000	$68,000
   Plus: Desired ending inventory	6,200
   Inventory needed	64,200
   Less: Beginning inventory	5,800
   Required purchases (on account)	$58,400

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.