In May 2022, the budget committee of Big Jim Stores assembles the following data for preparing the merchandise purchases budget for the month of June: 

1. Expected sales: June $500,000; July $600,000. 

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

3. Desired ending merchandise inventory is 30% of the following month’s cost of goods sold. 

4. The beginning inventory at June 1 will be the desired amount.

Instructions 

a. Calculate the budgeted merchandise purchases for June.

b. Prepare the budgeted income statement for June through gross profit on sales.