Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation.

-At the end of January, budgeted ending inventory is:
A)$20,000
B)$28,000
C)$40,000
D)None of these answers are correct.

Question

Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation.
 
-At the end of January, budgeted ending inventory is:
A)$20,000 
B)$28,000 
C)$40,000 
D)None of these answers are correct.

Quizplus · Accepted Answer

The budgeted ending inventory can be calculated using the following formula:
Ending Inventory = Beginning Inventory + Purchases - Cost of Goods Sold

From the information given in the budget, we know that:
Beginning Inventory = $24,000
Purchases = $156,000
Cost of Goods Sold = $112,000

Substituting these values in the above formula, we get:
Ending Inventory = $24,000 + $156,000 - $112,000
Ending Inventory = $68,000

Therefore, the budgeted ending inventory for January is $68,000. The closest answer choice to this amount is B) $28,000.

Answer the Following Questions Using the Information Below