Problem 9-5A The budget committee of Litwin Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2014 1. 2. 3, 4. Sales for May are expected to be $808,000. 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 Company policy is to maintain ending merchandise inventory at 15% of the following month's cost of goods sold Operating expenses are estimated to be: Sales salaries Advertising Delivery expense Sales commissions Rent expense Depreciation Utilities Insurance $28,800 6 % 3 % 5 % per month of monthly sales of monthly sales of monthly sales $5,710 per month per month $700 per month $590per month $870 5. Income taxes are estimated to be 30% of income from operations