I need help with part b. In May 2017, the budget committee of Grand Stores assem

Question

I need help with part b.

In May 2017, the budget committee of Grand Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. 1. Expected sales: June $512,200, July $620,600. 2. Cost of goods sold is expected to be 75% of sales. 3. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold. 4. The beginning inventory at June 1 will be the desired amount. *(a) Compute the budgeted merchandise purchases for June. *(b) Prepare the budgeted multiple-step income statement for June through gross profit.

Explanation / Answer

Part A:

Part B:

GRAND STORES
Merchandise Purchases Budget
For the Month Ending June 30, 2014 Cost of Goods Sold (510200*75%) 382650 Add Desired Ending Inventory (620900*75%*30%) 139703 522353 Less Opening Inventory (510200*75%*30%) 114795 Purchases 407558

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