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 $120.000, $90.000, $210.000, and $30,000, respectively. 2. Cost of goods sold is 25 percent of expected sales. 3. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: Salaries: $39.000 Delivery expense: 4 percent of monthly sales Rent expense on the warehouse: $1,500 Utilities: $300 Insurance: $210 Other expenses: $310 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the budgeted cost of purchases for each month in the second quarter. April 27,3755 May 33,000 $ June 36,750 Total cost of budgeted purchases S 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 $120.000, $90,000. $210,000, and $30,000, respectively. 2. Cost of goods sold is 25 percent of expected sales. 3. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be Salaries: $39,000 Delivery expense: 4 percent of monthly sales Rent expense on the warehouse: $1,500 Utilities: $300 Insurance: $210 Other expenses: $310 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 $ 120,000 $ 90,000 $ 210,000 30,000 22,500 52 500 Budgeted Sales Revenue Budgeted Cost of Goods Sold Budgeted Gross Margin Budgeted Net Operating Income