Donna Tse recently joined Cycle World, a bicycle store in Dartmouth, as an assistant manager. She recently finished her accounting courses. Cycle World€™s manager and owner, Jeff Towry, asks Tse to prepare a budgeted income statement for the upcoming year based on the information he has collected. Tse€™s budget follows:

Requirement
Tse does not want to give Towry this budget without making constructive suggestions for steps Towry could take to improve expected performance. Write a memo to Towry outlining your suggestions. Your memo should take the following form:
Date:
To: Mr. Jeff Towry, Manager
Cycle World
From: Donna Tse
Subject: Cycle World€™s budgeted income statement

Transcribed Image Text:

CYCLE WORLD Budgeted Income Statement For the Year Ending July 31 Sales revenue Cost of goods sold.. Gross proti Operating expenses: $244,000 177,000 67,000 Salary and commission expense Rent expense Depreciation expense Insurance expense Miscellaneous expenses S46,000 8,000 2,000 800 12,000 Operating loss Interest expense Net loss 68,800 1,800) 225 S (2,025)