May 2017, the budget committee of Grand Stores assembles the following data in preparation of

budgeted merchandise purchases for the month of June.

1 Fynected sales: lune $500.000. lulv $600.000

1. Cost of goods sold is expected to be 80% of sales.
2. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold.
3. The beginning inventory on June 1 is $112,500.

Instructions

1. Compute the budgeted merchandise purchases for June. [2 Marks]
2. Calculate the gross profit for June. [1 Mark]