Exhibit 18-10 Streamer Company sells float-tubes for recreational fly-fishing. A review of the company's historical operations shows that gross margin consistently averages 40% of sales. Company guidelines indicate that ending inventory at the end of any quarter should always be 25% of the next quarter's budgeted cost of goods sold. The expected sales for Streamer's next four quarters are shown below.

-Refer to Exhibit 18-10. If Streamer prepares a pro-forma income statement for the third quarter, what amount would be shown for inventory available for sale?

Question

Exhibit 18-10 Streamer Company sells float-tubes for recreational fly-fishing. A review of the company's historical operations shows that gross margin consistently averages 40% of sales. Company guidelines indicate that ending inventory at the end of any quarter should always be 25% of the next quarter's budgeted cost of goods sold. The expected sales for Streamer's next four quarters are shown below.
 
-Refer to Exhibit 18-10. If Streamer prepares a pro-forma income statement for the third quarter, what amount would be shown for inventory available for sale?

Quizplus · Accepted Answer

The Answer of Exhibit 18-10 Streamer Company sells float-tubes for recreational fly-fishing. A review of the company's historical operations shows that gross margin consistently averages 40% of sales. Company guidelines indicate that ending inventory at the end of any quarter should always be 25% of the next quarter's budgeted cost of goods sold. The expected sales for Streamer's next four quarters are shown below.
 
-Refer to Exhibit 18-10. If Streamer prepares a pro-forma income statement for the third quarter, what amount would be shown for inventory available for sale?

Exhibit 18-10 Streamer Company Sells Float-Tubes for Recreational Fly-Fishing