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.

Prepare the budgeted multiple-step income statement for June through gross profit.

1. Expected sales: June $514,800, July $613,100. 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.

Explanation / Answer

Prepare the budgeted multiple-step income statement for June through gross profit.

Expected sales revenue 514800 Less: cost of goods sold (386100) Gross profit 128700

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