The budget committee of Clothing Goods, an upscale women's clothing retailer, has assembled the following data. As the business manager, you must prepare the budgeted income statements for May and June.

Sales in April were $42,000. You forecast that monthly sales will increase 10% in May and an additional 5% in June.

b.

Clothing Goods maintains inventory of $9,000 plus 20% of the sales revenues budgeted for the following month. Monthly purchases average 50% of sales revenue in that same month. Actual inventory on April 30 is $18,240. Sales budgeted for July are $65,000.

c.

Monthly salaries amount to $3,000. Sales commissions equal 10% of sales for that month. Combine salaries and commissions into a single figure.

d.

Other monthly expenses are as follows:

	Rent expense . . . . . . . . . . . . .	$2,600, paid as incurred
	Depreciation expense . . . . . .	$200
	Insurance expense . . . . . . . . .	$100, expiration of prepaid amount
	Income tax . . . . . . . . . . . . . . .	20% of operating income

Before completing the budgeted income statements, compute the budgeted cost of goods sold for May and June. (Round your answers to the nearest whole dollar.)

1.) May: June:

Beginning Inventory:

Purchases:

Cost of Goods Available For Sale:

Ending Inventory:

Cost Of Goods Sold:

2.) Now Complete the Budgeted Income Statements for May and June (Round your Answers)

May: June:

Sales Revenue: ________ _________

Cost of Goods Sold: ________ _________

Gross Profit: ________ __________

Operating Expenses:

Salaries and Commission Expense: _________

Rent Expense: _________

Depreciation Expense: _________

Insurance Expense: _________ _________ ______ __________

Operating Income: _________ _______ __________

Income Tax Expense: __________ _______ ___________