In May 2017, the budget committee of Grand Stores assembles the following data i

Question

In May 2017, the budget committee of Grand Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. Expected sales: June $501,000, July $607,300. 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 whole dollar, e.g. 5,275.)

Explanation / Answer

Grand Stores Merchandise Purchase Budget Statement showing computations Particulars June July Sales           501,000.00         607,300.00 Cost of Goods Sold June= 501,000*75% July = 607,300*.75           375,750.00         455,475.00 EndinG merchandise inventory = 30% Nextmonth COGS 455,475*.30           136,642.50 Total Goods available for sale = 375,750 + 136,642.50           512,392.50 Beginning Inventory = 375,750*30%           112,725.00 Purchases = 512,392.50 - 112,725           399,667.50

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