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In May 2020, the budget committee of Big Jim Stores assembles the following data for preparing the merchandise purchases budget for the month of June:
In May 2020, the budget committee of Big Jim Stores assembles the following data for preparing the merchandise purchases budget for the month of June:
| 1. | Expected sales: June $473,000; July $642,000. | ||
| 2. | Cost of goods sold is expected to be 75% of sales. | ||
| 3. | Desired ending merchandise inventory is 30% of the following months cost of goods sold. | ||
| 4. | The beginning inventory at June 1 will be the desired amount. |
Calculate the budgeted merchandise purchases for June.
| Budgeted merchandise purchases | $ |
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Prepare the budgeted income statement for June through gross profit on sales.
| BIG JIM STORES Budgeted Income Statement For the Month Ending June 30, 2020 | |||||
| Gross ProfitIncome Tax ExpenseIncome Before Income TaxesCost of Goods Available for SaleNet Income / (Loss)SalesInventory, June 30PurchasesSelling and Administrative ExpensesInventory, June 1Cost of Goods Sold | $ | ||||
| Cost of Goods SoldInventory, June 1PurchasesSelling and Administrative ExpensesNet Income / (Loss)>Inventory, June 30SalesCost of Goods Available for SaleIncome Tax ExpenseIncome Before Income TaxesGross Profit | |||||
| Inventory, June 1Cost of Goods Available for SaleInventory, June 30Income Tax ExpenseSalesGross ProfitPurchasesIncome Before Income TaxesCost of Goods SoldNet Income / (Loss)>Selling and Administrative Expenses | $ | ||||
| AddLess: Gross ProfitSalesInventory, June 30Net Income / (Loss)>Income Tax ExpensePurchasesInventory, June 1Selling and Administrative ExpensesIncome Before Income TaxesCost of Goods Available for SaleCost of Goods Sold | |||||
| Cost of Goods SoldIncome Tax ExpenseInventory, June 30Gross ProfitInventory, June 1SalesIncome Before Income TaxesSelling and Administrative ExpensesNet Income / (Loss)>Cost of Goods Available for SalePurchases | |||||
| AddLess: Cost of Goods SoldSalesSelling and Administrative ExpensesInventory, June 1Gross ProfitNet Income / (Loss)>Cost of Goods Available for SaleIncome Tax ExpenseIncome Before Income TaxesInventory, June 30Purchases | |||||
| Inventory, June 1Gross ProfitIncome Before Income TaxesPurchasesCost of Goods SoldNet Income / (Loss)>SalesSelling and Administrative ExpensesInventory, June 30Cost of Goods Available for SaleIncome Tax Expense | |||||
| Cost of Goods Available for SaleCost of Goods SoldSelling and Administrative ExpensesNet Income / (Loss)>SalesGross ProfitIncome Before Income TaxesInventory, June 1Inventory, June 30Income Tax ExpensePurchases | $ | ||||
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