TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year. Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
Which of the following amounts is irrelevant in the preparation of TFS' budgeted income statement?

Question

TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year. Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below: 
Which of the following amounts is irrelevant in the preparation of TFS' budgeted income statement?

Quizplus · Accepted Answer

The expected inflows of cash are not relevant in the preparation of TFS' budgeted income statement. The budgeted income statement only considers expenses and revenues related to the sale of products, and cash inflows are not directly related to this. Beginning inventory, expected revenue, and budgeted support department costs are all relevant in the preparation of the budgeted income statement.

TFS Corporation, a Retail Company Selling Hotel Furniture, Has Just