The budget committee of Ivanhoe Company collects the following date for its San Miguel Store in preparing budgeted income statements for May and June 2020. 1. Sales for May are expected to be $1,120,000. 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 $30,700 per month Advertising 6 % of monthly sales Delivery expense 2 9% of monthly sales Sales commissions 5 % of monthly sales Rent expense $5,480 per month Depreciation $850 per month Utilities $660 per month Insurance $560 per month 5. Interest expense is $2,000 per month. Income taxes are estimated to be 30%% of income before income taxes.(a) Prepare the merchandise purchases budget for each month in columnar form. IVANHOE COMPANY San Miguel Store Merchandise Purchases Budget May June $ v