October sales were $260,000.

Sales are projected to go up by 8 % in November (from the October sales) and another 25 % in December (from the November sales) and then return to the October level in January.

25 % of sales are made in cash, while the remaining 75 % are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a 4 % transaction fee, and deposit the net amount (sales price less the transaction fee) in the store's bank account daily.

Stewart Corner Shoppe's gross profit is 30 % of its sales revenue.

For the next several months, the store wants to maintain an ending merchandise inventory equal to $16,000 + 20 % of the next month's cost of goods sold. The September 30 inventory was $52,400.

Expected monthly operating expenses include:

Wages of store workers are $8,700 per month

Utilities expense of $1,800 in November and $2,300 in December

Property tax expense of $1,900 per month

Property and liability insurance expense of $1,100 per month

Depreciation expense of $9,000 per month

Transaction fees, as stated above, are 4 % of credit and debit card sales

Requirement 2. Prepare the cost of goods sold, inventory, and purchases budget for November and December.

Stewart Corner Shoppe
Cost of Goods Sold, Inventory, and Purchases Budget
For the Months of November and December
	November	December
Cost of goods sold
Plus: Desired ending inventory
Total inventory required
Less: Beginning inventory
Purchases