Sentra Sporting Company sells tennis rackets and other sporting equipment. The purchasing department manager prepared the inventory purchases budget. Sentra's policy is to maintain an ending inventory balance equal to 15% of the following month's cost of goods sold. January's budgeted cost of goods sold is $70,000. What is the amount of cost of goods sold the company will report on its fourth quarter pro forma income statement?

Question

Sentra Sporting Company sells tennis rackets and other sporting equipment. The purchasing department manager prepared the inventory purchases budget. Sentra's policy is to maintain an ending inventory balance equal to 15% of the following month's cost of goods sold. January's budgeted cost of goods sold is $70,000.  What is the amount of cost of goods sold the company will report on its fourth quarter pro forma income statement?

Quizplus · Accepted Answer

Cost of goods sold for 4^th quarter = $60,000 + $40,000 + $50,000 = $150,000

Sentra Sporting Company Sells Tennis Rackets and Other Sporting Equipment