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Question - In May 2020, the budget committee of Crane Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June.
1. Expected sales: June $525,400, July $605,600.
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.
Required -
1. Compute the budgeted merchandise purchases for June.
2. Prepare the budgeted multiple-step income statement for June through gross profit.
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