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. 2. 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. 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: per month $35,000 6 % 2 % Sales salaries Advertising Delivery expense Sales commissions Rent expense Depreciation Utilities Insurance of monthly sales of monthly sales of monthly sales per month 5 % per month $5,000 $800 $600 $500 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 600000 Budgeted Cost of Goods Sold 630000 Add Desired Ending Merchandise Inventory 63000 66150 Total 663000 696150 Less Beginning Merchandise Inventory 60000 63000 603000 633150 Required Merchandise Purchases SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO VIDEO Attempts: 1 of 5 used Help System Announcements nment 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 5 Cost of Goods Solo Beginning Inventory 60000 63000 Purchases Les X acy Policy. I 2000-2021 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Operating Eige Delivery 16000 169000 Sale Salaries 35000 35000 XP M ding 48000 50400 DENON 16000 00891 Sales Commissions 40000 42000 0005 5000 Dodation 008 800 Lilit 600 600 K Insurance 500 500 ter Expense 2000 2000 he Total Operating Expenses 147900 153100 ment 5000 3000 E 800 600 600 IN Insurance 500 500 Interest Expense 2000 2000 Total Operating Expenses 147900 133100 come Beer Income Taxes 52100 56900 comes then 15690 17070 Net Income and 36470 39820