Question Completion:
Inventory Purchases Budget January February March April
Budgeted cost of goods sold $ 60,000 $ 64,000 $ 70,000 $79,000
Plus: Desired ending inventory 6,400
Inventory needed 66,400
Less: Beginning inventory 9,000
Purchases (on account) $ 57,400
Answer:
Thornton Company
a) Inventory Purchases Budget January February March Total
Budgeted cost of goods sold $ 60,000 $ 64,000 $ 70,000 $ 194,000
Plus: Desired ending inventory 6,400 7,000 7,900 7,900
Inventory needed 66,400 71,000 77,900
Less: Beginning inventory 9,000 6,400 7,000
Purchases (on account) $ 57,400 $ 64,600 $ 70,900
b) Cost of goods sold for first quarter = $194,000
c) Ending Inventory at the end of first quarter = $7,900
Explanation:
Data and Calculations:
April's budgeted cost of goods sold = $79,000
Inventory Purchases Budget January February March April
Budgeted cost of goods sold $ 60,000 $ 64,000 $ 70,000 $79,000
Plus: Desired ending inventory 6,400 7,000 7,900
Inventory needed 66,400 71,000 77,900
Less: Beginning inventory 9,000 6,400 7,000
Purchases (on account) $ 57,400 $ 64,600 $ 70,900
Cost of goods sold for the first quarter = $194,000 (60,000 + 64,000 + 70,000)
Ending Inventory at the end of the first quarter = 10% of $79,000 = $7,900
