The budget committee of Suppar Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2020.

1.		Sales for May are expected to be $880,000. 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		$31,600		per month
Advertising		6	%	of monthly sales
Delivery expense		2	%	of monthly sales
Sales commissions		5	%	of monthly sales
Rent expense		$6,050		per month
Depreciation		$900		per month
Utilities		$660		per month
Insurance		$580		per month

5.

Interest expense is $2,000 per month. Income taxes are estimated to be 30% of income before income taxes.

(a)

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.

Prepare the merchandise purchases budget for each month in columnar form.

SUPPAR COMPANY San Miguel Store Merchandise Purchases Budget For the Quarter Ended June, 2020For the Months of May and June, 2020May and June, 2020
		May		June
Units to be ProducedDesired Ending Merchandise InventoryRequired Merchandise PurchasesDirect Materials PurchasesBudgeted Cost of Goods SoldTotalBeginning Merchandise InventoryDesired Ending Direct MaterialsBeginning Direct MaterialsTotal Materials RequiredDirect Materials per Unit		$		$
AddLess: Required Merchandise PurchasesDesired Ending Merchandise InventoryTotalDirect Materials PurchasesTotal Materials RequiredDesired Ending Direct MaterialsBeginning Merchandise InventoryUnits to be ProducedBudgeted Cost of Goods SoldBeginning Direct MaterialsDirect Materials per Unit
Total Materials RequiredDesired Ending Merchandise InventoryDesired Ending Direct MaterialsDirect Materials PurchasesTotalUnits to be ProducedBudgeted Cost of Goods SoldRequired Merchandise PurchasesBeginning Direct MaterialsDirect Materials per UnitBeginning Merchandise Inventory
AddLess: Budgeted Cost of Goods SoldDesired Ending Merchandise InventoryUnits to be ProducedBeginning Direct MaterialsDesired Ending Direct MaterialsBeginning Merchandise InventoryTotal Materials RequiredTotalDirect Materials PurchasesRequired Merchandise PurchasesDirect Materials per Unit
Total Materials RequiredRequired Merchandise PurchasesUnits to be ProducedDirect Materials per UnitTotalBeginning Direct MaterialsDesired Ending Direct MaterialsBudgeted Cost of Goods SoldDirect Materials PurchasesBeginning Merchandise InventoryDesired Ending Merchandise Inventory		$		$