Becker Enterprises, Inc., has two products, palm-size computers and programmable calculators. Kara Rogan, the chief executive officer, is working with her staff to prepare next year€™s budget. Ms. Rogan estimates that sales will increase at an annual rate of 10 percent for palm-size computers and 4 percent for programmable calculators. The current year sales revenue data follow.

Based on the company€™s past experience, cost of goods sold is usually 75 percent of sales revenue. Company policy is to keep 10 percent of the next period€™s estimated cost of goods sold as the current period ending inventory.

Required
a. Prepare the company€™s sales budget for the next year for each quarter by individual products.
b. If the selling and administrative expenses are estimated to be $500,000, prepare the company€™s budgeted annual income statement for the next year.
c. Ms. Rogan estimates the current year€™s ending inventory will be $68,000 for computers and $32,000 for calculators and the ending inventory next year will be $78,000 for computers and $42,000 for calculators. Prepare the company€™s inventory purchases budget for the next year showing quarterly figures byproduct.

Fourth Quarter Quarter Quarter Quarter First Second Third Total Palm-size computers$600,000 $650,000 720,000 830,000 2,800,000 000 325,000 1140,000 $850,000 $925,000 $1,010,000 $1,155,000 $3,940,000 Programmable calculators 250,000 275,000 Total 290,000