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The budget committee of Suppar Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2017.

The budget committee of Suppar Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2017.
1. Sales for May are expected to be $802,000. 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.
Prepare the merchandise purchases budget for each month in columnar form.(Round answers to 0 decimal places, e.g. 5,275.)
SUPPAR COMPANY San Miguel Store Merchandise Purchases Budget For the Months of May and June, 2017For the Quarter Ended June, 2017May and June, 2017
May June
Direct Materials PurchasesBeginning Direct MaterialsDesired Ending Merchandise InventoryBeginning Merchandise InventoryDesired Ending Direct MaterialsBudgeted Cost of Goods SoldTotalDirect Materials per UnitRequired Merchandise PurchasesTotal Materials RequiredUnits to be Produced $ $
AddLess: Beginning Direct MaterialsDesired Ending Merchandise InventoryTotal Materials RequiredUnits to be ProducedDesired Ending Direct MaterialsDirect Materials per UnitBeginning Merchandise InventoryBudgeted Cost of Goods SoldTotalDirect Materials PurchasesRequired Merchandise Purchases
Beginning Merchandise InventoryBudgeted Cost of Goods SoldRequired Merchandise PurchasesDirect Materials PurchasesDirect Materials per UnitTotal Materials RequiredTotalUnits to be ProducedDesired Ending Direct MaterialsBeginning Direct MaterialsDesired Ending Merchandise Inventory
AddLess: Direct Materials PurchasesBeginning Merchandise InventoryBudgeted Cost of Goods SoldDesired Ending Direct MaterialsDesired Ending Merchandise InventoryUnits to be ProducedDirect Materials per UnitBeginning Direct MaterialsTotalRequired Merchandise PurchasesTotal Materials Required
TotalBeginning Direct MaterialsDirect Materials per UnitBeginning Merchandise InventoryDirect Materials PurchasesBudgeted Cost of Goods SoldTotal Materials RequiredDesired Ending Direct MaterialsDesired Ending Merchandise InventoryRequired Merchandise PurchasesUnits to be Produced $

$

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