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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%

in

November

(from the

October

sales) and another

25%

in

December

(from the

November

sales) and then return to the

October

level in

January.

25%

of sales are made in cash, while the remaining

75%

are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a

4%

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 is

30%

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. The

September

30 inventory was

$56,400.

Expected monthly operating expenses include:

Wages of store workers are

$8,600

per month

Utilities expense of

$1,700

in

November

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

and

December:

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

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