The budget committee of Lily Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2022.

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 months cost of goods sold.
4.		Operating expenses are estimated to be as follows:

Sales salaries		$30,100		per month
Advertising		6	%	of monthly sales
Delivery expense		2	%	of monthly sales
Sales commissions		5	%	of monthly sales
Rent expense		$5,390		per month
Depreciation		$900		per month
Utilities		$660		per month
Insurance		$510		per month

5.

Interest expense is $2,000 per month. Income taxes are estimated to be 20% of income before income taxes.

Prepare the merchandise purchases budget for each month in columnar form. LILY COMPANY San Miguel Store Merchandise Purchases Budget May June $ $ $