a.

Sales in April were

$ 48 comma 000$48,000.

You forecast that monthly sales will increase

1010%

in May and an additional

55%

in June.

b.

Clothing GoodsClothing Goods

maintains inventory of

$ 10 comma 000$10,000

plus

3030%

of the sales revenues budgeted for the following month. Monthly purchases average 50% of sales revenue in that same month. Actual inventory on April 30 is

$ 25 comma 840$25,840.

Sales budgeted for July are

$ 45 comma 000$45,000.

c.

Monthly salaries amount to

$ 5 comma 000$5,000.

Sales commissions equal

55%

of sales for that month. Combine salaries and commissions into a single figure.

d.

Other monthly expenses are as follows:

	Rent expense. . . . . . . . . . . . .	$2,400, paid as incurred
	Depreciation expense. . . . . .	$400
	Insurance expense. . . . . . . . .	$200, expiration of prepaid amount
	Income tax. . . . . . . . . . . . . . .	20% of operating income

Before completing the budgeted income statements, compute the budgeted cost of goods sold for May and June. (Round your answers to the nearest whole dollar.)

		May	June
	Beginning inventory	$25,840	$26,632
	Purchases	26,400	27,720
	Cost of goods available for sale	52,240	54,352
	Ending inventory	(26,632)	(23,500)
	Cost of goods sold	$25,608	$30,852

Now complete the budgeted income statements for May and June. (Round your answers to the nearest whole dollar.)

Clothing Goods
Budgeted Income Statements
For the Months Ended May 31 and June 30
	May		June
Sales revenue
Cost of goods sold
Gross profit
Operating expenses:
Salaries and commission expense
Rent expense
Depreciation expense
Insurance expense
Operating income
Income tax expense
Net income (loss)