Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Corner Shoppe is a local convenience store with the following information: October sales were $260,000. Sales are projected to go up by 8% in November
Corner Shoppe is a local convenience store with the following information:
October sales were$260,000. | ||
Sales are projected to go up by 8% inNovember (from theOctober sales) and another25% inDecember (from theNovember sales) and then return to theOctober level inJanuary. | ||
25% of sales are made in cash, while the remaining75% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a4% transaction fee, and deposit the net amount (sales price less the transaction fee) in the store's bank account daily. | ||
Slate Corner Shoppe's gross profit is30% of its sales revenue. | ||
For the next several months, the store wants to maintain an ending merchandise inventory equal to $20,000 +20% of the next month's cost of goods sold. TheSeptember 30 inventory was$56,400. | ||
Expected monthly operating expenses include: | ||
Wages of store workers are $8,600 per month | ||
Utilities expense of $1,700 inNovember and$1,400 in December | ||
Property tax expense of $2,600 per month | ||
Property and liability insurance expense of $1,200 per month | ||
Depreciation expense of $4,000 per month | ||
Transaction fees, as stated above, are 4% of credit and debit card sales |
Prepare the following budgets for November andDecember: | |
1. | Sales budget |
2. | Cost of goods sold, inventory, and purchases budget |
3. | Operating expense budget |
4. | Budgeted income statement |
Slate Corner Shoppe | ||||
Sales Budget | ||||
For the Months of November and December | ||||
| November | December | ||
Cash sales |
|
| ||
Credit sales |
|
| ||
Total sales |
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started