following are grand stores company balance sheet at december 31,2020 and information regarding grand store policies and past experience

grand stores company balance

sheet at december 31,2020

assets.

cash 33,000

accounts recievable 31,000

inventory 59,000

fixed assets 102,000

total 225,000

equities.

accounts payable 9,000

income taxes payable 8,000

common stock 180,000

retained earnings 28,000

total 225,000

additional information :

1. budgeted sales for the first five months of 2021 are 50,000 , 60,000 ,70,000 , 66,000 and 65,000 respectively .

2.all sales are on credit and are collected 20% in the month of sales and 80% in the month after sale .

3.costs of goods sold is expected to be 60% of sales.

4. desired ending inventory is maintained at budgeted costs of goods sold requirements for the following next two months .

5.purchases are all on credit and are paid 80% in the month of purchase and 20% in the month after pirchase .

6. selling and administrative expenses (mixed cost) are 20% of sales plus 6000 per month which includes 1000 of depriciation and are paid in the month incured .

7.grand stores income tax rate is 25% with taxes being paid in the month after they are accrued.

required :

a. compute the budgeted merchandise purchased for january 2021

b. prepare the budgeted income statement for january 2021

c. prepare a cash budget for the month ended january 31,2021 .