Condensed versions of a Chevron convenience store's most recent income statement and balance sheet reponed the following figures. The business uses a periodic in\entor\' system. Using the cost-of-goods-sold model to budget operations (Obj. 1} CHEVRON CONVENIENCE STORE Balance Sheet December 31, 20X4 (Thousands) Assets Cash S 70 In\entories 35 Land and buildings, net... 360 Total assets S465 Liabilities and Capital -Accounts payable S 35 Note payable 280 Total liabilities 315 Owner, capital 150 Total liabilities and capital S465 CHEVRON CONVENIENCE STORE Income Statement Year Ended Decennber 31, 20X4 (Thousands) Sales S800 Cost of sales 660 Gross profit 140 Operating expenses 80 Net income S60 The owner is budgeting for 20X5. He expects sales and cost of sales to increase by 8%. To meet customer demand for the increase in sales, ending inventor\' will need to be S40 thousand at December 31, 20X5. The ouTier can lower operating expenses by doing some of the work himself. He hopes to earn a net income of S75 thousand next year. Required 1. A key variable the owner can control is the amount of inventor\- he purchases. Show how to determine the amount of purchases he should make in 20X5 (amounts in thousands). 2. Prepare the store's budgeted income statement for 20X5 to reach the target net income