Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

E8-20 (Algo) Preparing a Merchandise Purchases Budget and a Budgeted Income Statement [LO 8-3h, 8-5] Citrus Girl Company (CGC) purchases quality citrus produce from local

image text in transcribedimage text in transcribedimage text in transcribed

E8-20 (Algo) Preparing a Merchandise Purchases Budget and a Budgeted Income Statement [LO 8-3h, 8-5] Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet across the United States. To keep costs down, CGC maintains a warehouse, but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: 1. Expected monthly sales for April, May, June, and July are $150,000, $120,000, $240,000, and $60,000, respectively. 2. Cost of goods sold is 30 percent of expected sales. 3. CGC's desired ending inventory is 50 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: O Salaries: $36,000 Delivery expense: 6 percent of monthly sales Rent expense on the warehouse: $3,000 Utilities: $600 Insurance: $300 Other expenses: $400 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter. Required 1 Required 2 Compute the budgeted cost of purchases for each month in the second quarter. April May June Total cost of budgeted purchases $ 150,000 $ 120,000 $ 240,000 Complete the budgeted income statement for each month in the second quarter. CITRUS GIRL COMPANY Budgeted Income Statement For the Month Ending April 30 May 31 June 30 Budgeted Gross Margin Budgeted Net Operating Income $ 55,700 $ 36,500 $ 113,300

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions