Problem 22-05A (Part Level Submission) The budget committee of Suppar Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2020. 1. Sales for May are expected to be $800,000. Sales in June and July are expected to be 5% higher than the preceding month. 2. Cost of goods sold is expected to be 75% of sales. 3. Company policy is to maintain ending merchandise inventory at 10% of the following month's cost of goods sold. 4. Operating expenses are estimated to be as follows: Sales salaries Advertising Delivery expense Sales commissions Rent expense Depreciation Utilities Insurance $35,000 6% 2 % 5 % $5,000 $800 $600 $500 per month of monthly sales of monthly sales of monthly sales per month per month per month per month 5. Interest expense is $2,000 per month. Income taxes are estimated to be 30% of income before income taxes. (a) Your answer is correct. Prepare the merchandise purchases budget for each month in columnar form. SUPPAR COMPANY San Miguel Store Merchandise Purchases Budget For the Months of May and June, 2020 May June Budgeted Cost of Goods Sold 600000 630000 Desired Ending Merchandise Inventory 63000 66150 Total 663000 696150 less Beginning Merchandise Inventory -60000 -63000 T Required Merchandise Purchases 603000 633150 (b) Prepare budgeted multiple-step income statements for each month in columnar form. Show in the statements the details of cost of goods sold. SUPPAR COMPANY San Miguel Store Budgeted Income Statement For the Months of May and June, 2020 May June Sales 800000 840000 Cost of Goods Sold Beginning Inventory 60000 63000 Purchases -63000 -66150 Ending Inventory -600000 -630000 Less ^ : Operating Expenses 200000 210000 Sales -35000 -35000 Net Income / (Loss) LINK TO TEXT LINK TO VIDEO