The budget committee of Designer Dresses, 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.

a.

Sales in April were $40,000. You forecast that monthly sales will increase 10% in May and an additional 22% in June.

b.

Designer Dresses maintains inventory of 0$11,000 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 $19,800. Sales budgeted for July are $45,000.

c.

Monthly salaries amount to $3,000. Sales commissions equal 55% 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. . . . . .	$400
	Insurance expense. . . . . . . . .	$300, 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.)

		May	June
	Beginning inventory
	Purchases
	Cost of goods available for sale
	Ending inventory
	Cost of goods sold

Now complete the budgeted income statements for May and June. (Round your answers to the nearest whole dollar.)

Designer Dresses
Budgeted Income Statements
For the Months Ended May 31 and June 30
	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
Net income (loss)