In May 2014, the budget committee of Grand Stores assembles the following data i

Question

In May 2014, the budget committee of Grand Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. Expected sales: June $530,200, July $610,800. Cost of goods sold is expected to be 75% of sales. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold. The beginning inventory at June 1 will be the desired amount. Compute the budgeted merchandise purchases for June. (Round answers to the nearest who/e dollar, e.g. 5,275.) Prepare the budgeted income statement for June through gross profit.

Explanation / Answer

Budgeted merchandise purchase for june;

Income statement

Sales 530200 Add ending inventory(.3×.75×610800) 137430 Total 667630 Less beginning inventory(.3×.75×530200) 119295 Merchandise purchase 548335

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