Create a budgeted income statement for October - December

In September, cash sales were $15,000 and credit sales $35,000. Total expected sales in the following three months are: $64,000 in October; $82,000 in November; and $96,000 in December. The company expects 25% of the sales of each month to be cash sales and the remainder credit sales. Credit sales are expected to be collected 60% in the month of the sale, 30% in the next month, and 10% in the following month.

All purchases of inventory are on credit. Purchases of inventory in September were $35,000. The company estimates purchases in the following three months to be: $30,000 in October, $35,000 in November and $40,000 in December. Purchases are paid 40% in the month of purchase, and 60% in the following month.

Wages expense is estimated to be $12,000 in October, $16,000 in November and $20,000 in December, paid in cash.

Other operating expenses are budgeted to be $18,000 in October, $22,000 in November and $24,000 in December, paid in cash.

Depreciation expenses of $1,400 per month are expected.

The cost of sales is estimated as 40% of sales revenue each month.

Dividends of $10,000 are budgeted to be paid in December.

Proceeds from a bank loan to be received in October: $40,000

The cash balance at 1^st October 2020 was $6,000