Monument Corp is preparing its budget for the first quarter of 2018
The following data is provided:
Inventory, Purchases, and COGS Budget Jan Feb March
Cost of goods sold (a) $34,000 $27,000 $22,500
Desired ending inventory (b) 11,750 10,625 ?
Total inventory required 45,750 37,625
Less: Beginning inventory (20,000 ) (11,750 )
Purchases 25,750 25,875
(a) COGS = 75% of sales
(b) $5,000 + 25% of COGS for next month
April's cost of goods sold is 32,000. The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be ________.
A) $10,625
B) $11,750
C) $34,000
D) $13,000
D .D) Cost of goods sold = (32,000 x 25%) + 5,000 = $13,000
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