The budget committee of Deleon Company collects the following data for its San Miguel Store in preparing
Question:
The budget committee of Deleon Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2011.
1. Sales for May are expected to be $800,000. Sales in June and July are expected to be 10% higher than the preceding month.
2. Cost of goods sold is expected to be 75% of sales.
3. Company policy is to maintain ending merchandise inventory at 20% of the following month's cost of goods sold.
4. Operating expenses are estimated to be:
5. Income taxes are estimated to be 30% of income from operations.Instructions(a) Prepare the merchandise purchases budget for each month in columnar form.(b) Prepare budgeted income statements for each month in columnar form. Show in the statements the details of cost of goodssold.
$30,000 per month 5% of monthly sales 3% of monthly sales 4% of monthly sales $5,000 per month $800 per month $600 per month $500 per month Sales salaries Advertising Delivery expense Sales commissions Rent expense Depreciation Utilities Insurance
Step by Step Answer:
a DELEON COMPANY San Miguel Store Merchandise Purchases Budget For the Months of May and June 2011 M...View the full answer
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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