Indicate Whether Each of the Following Statements Is True or False

Indicate whether each of the following statements is true or false.
1. An inventory purchases budget is prepared based on sales projections from the sales budget.
2. The amount of budgeted purchases of inventory equals cost of goods sold plus the beginning inventory less ending inventory.
3. The inventory purchases budget generally includes a schedule of cash payments for the period.
4. The amount of cost of goods sold reported on the pro forma income statement comes from the inventory purchases budget.
5. The inventory purchases budget indicates the amount expected for ending inventory, which is reported on the pro forma income statement.