Prepare budgeted income statements for each month in

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Reference no: EM13568505

The budget committee of Litwin Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2014.

Sales for May are expected to be $800,000. Sales in June and July are expected to be 5% higher than the preceding month.

Cost of goods sold is expected to be 75% of sales.

Company policy is to maintain ending merchandise inventory at 15% of the following month's cost of goods sold.

4. Operating expenses are estimated to be:

Sales salaries	$30,000		per month
Advertising	6	%	of monthly sales
Delivery expense	3	%	of monthly sales
Sales commissions	5	%	of monthly sales
Rent expense	$5,000		per month
Depreciation	$800		per month
Utilities	$600		per month
Insurance	$500		per month

Income taxes are estimated to be 30% of income from operations.

Prepare the merchandise purchases budget for each month in columnar form.

Prepare budgeted income statements for each month in columnar form. Show in the statements the details of cost of goods sold. (Round answers to 0 decimal places, e.g. 2,500.)

Reference no: EM13568505

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