Charter Company is preparing their budget for the first quarter of 2017.The following data is provided:

For the budgeted balance sheet at 31 March,what amount should be shown for Inventory?
A) $10 700
B) $8 750
C) $9 500
D) $9 800

Question

Charter Company is preparing their budget for the first quarter of 2017.The following data is provided:

For the budgeted balance sheet at 31 March,what amount should be shown for Inventory?
A) $10 700 
B) $8 750 
C) $9 500 
D) $9 800

Quizplus · Accepted Answer

From the provided data, we can see that the total cost of goods sold (COGS) for the first quarter is $64,200 and the gross profit is $35,800. Using the formula for calculating inventory:
Inventory = COGS - Gross Profit
Inventory = $64,200 - $35,800
Inventory = $28,400
Therefore, the budgeted amount for inventory on March 31st should be $9,800 (which is the value of inventory on January 1st plus the amount budgeted for purchases minus the cost of goods sold).

Charter Company Is Preparing Their Budget for the First Quarter