Question
Corner Shoppe is a local convenience store with the following information: Data Table October sales were $290,000 Sales Are projected to go up by 12%
Corner Shoppe is a local convenience store with the following information:
Data Table
- October sales were $290,000
- Sales Are projected to go up by 12% in November (from the October sales) and another 20% in December (from the November sales) then return to the October level in January.
- 25% of sales are made in cash well the remaining 75% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) Charge a 5% transaction fee and deposit the net amount (sales price less than the transaction fee) in stores bank account daily
- Gross profit is 40% of its sales revenue
- For the next several months the store wants to maintain an ending merchandise inventory equal to $11,000 + 25% of the next months cost of goods sold does. The September 30th inventory was $54,500.
- Expected monthly operating expenses include:
- wages of store workers are $9,100 per month
- Utility expenses of $12,000 in November and $2000 in December
- property tax expenses of $2300 per month
- property and liability insurance expense of $1000 per month
- depreciation expense of $7500 for month
- transaction fees as stated above R 5% of credit card and debit sales
Requirements: Prepare The following budgets for November and December
- Sales budget
- cost of goods sold, inventory, and purchases budget
- operating expense budget
- budget income statement
1. Prepare the sales budget for
November and December
.
Slattery Corner Shoppe | ||||
Sales Budget | ||||
For the Months of November and December | ||||
| November | December | ||
Cash sales |
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| ||
Credit sales |
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| ||
Total sales |
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Requirement 2. Prepare the cost of goods sold, inventory, and purchases budget for
November and December
.
Slattery Corner Shoppe | ||
Cost of Goods Sold, Inventory, and Purchases Budget | ||
For the Months of November and December | ||
| November | December |
Cost of goods sold |
|
|
Plus: Desired ending inventory |
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|
Total inventory required |
|
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Less: Beginning inventory |
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Purchases |
|
|
Requirement 3. Prepare the operating expense budget for
November and December
.
Slattery Corner Shoppe |
| ||||
Operating Expenses Budget |
| ||||
For the Months of November and December | |||||
| November | December | |||
Wage expense |
|
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Utilities expense |
|
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Property tax expense |
|
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Property and liability insurance expense |
|
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Depreciation expense |
|
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Credit/Debit card fees expense |
|
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Total operating expenses |
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|
Requirement 4. Prepare the budgeted income statement for
November
and
December
.
(Use the traditional format).
Slattery Corner Shoppe | ||
Budgeted Income Statement | ||
For the Months of November and December | ||
| November | December |
Sales revenue |
|
|
Less: Cost of goods sold |
|
|
Gross profit |
|
|
Less: Operating expenses |
|
|
Net income |
|
|
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