Chucks Convenience Stores income statement for the year ended December 31, 2013, and its balance sheet as

Question:

Chuck€™s Convenience Stores€™ income statement for the year ended December 31, 2013, and its balance sheet as of December 31, 2013, reported the following. The business is organized as a proprietorship, so it pays no corporate income tax. The owner is budgeting for 2014. He expects sales and cost of goods sold to increase by 10%. To meet customer demand, ending inventory will need to be $84,000 at December 31, 2014. The owner hopes to earn a net income of $166,000 next year.

Chuck€™s Convenience Stores€™ income statement for the year ended December

Requirements
1. One of the most important decisions a manager makes is the amount of inventory to purchase. Show how to determine the amount of inventory to purchase in 2014.
2. Prepare the store€™s budgeted income statement for 2014 to reach the target net income of $166,000. To reach this goal, operating expenses must decrease by$2,900.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-0133427530

10th edition

Authors: Walter Harrison, Charles Horngren, William Thomas

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