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. October November December Budgeted cost of goods sold60,000 40,000 50,000 Plus: Desired ending inventory6,000 ? ? Inventory needed66,000 ? ? Less: Beginning inventory9,000 ? ? Required purchase (on account)57,000 ? ? What is the amount of cost of goods sold the company will report on its fourth quarter pro forma income statement?
A. $50,000
B. $100,000
C. $150,000
D. $162,300
Answer: C
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