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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:
  1. wages of store workers are $9,100 per month
  2. Utility expenses of $12,000 in November and $2000 in December
  3. property tax expenses of $2300 per month
  4. property and liability insurance expense of $1000 per month
  5. depreciation expense of $7500 for month
  6. transaction fees as stated above R 5% of credit card and debit sales

Requirements: 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. 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

Credit sales

Total sales

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

Total inventory required

Less: Beginning inventory

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

Utilities expense

Property tax expense

Property and liability insurance expense

Depreciation expense

Credit/Debit card fees expense

Total operating expenses

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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