Exercise 21-20 (Part Level Submission) In May 2017, the budget committee of Gran

Question

Exercise 21-20 (Part Level Submission) 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 $529,600, July $615,500.

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.

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

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars June July Expected Sales              529,600.00              615,500.00 COGS at 75% of sales              397,200.00              461,625.00 Add Desired ending merchandise inventory = 30%*Next month COGS              138,487.50 Total available for sale              535,687.50 Less Beginning inventory = 397200*.30              119,160.00 Required purchases              416,527.50 MultiStep Income Statement Particulars Amount Sales              529,600.00 Cost of Goods Sold              397,200.00 Gross Profit              132,400.00

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