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. 2. Sales for May are expected to be $960,000. Sales in June and July are expected to be 5% higher than the preceding month. Cost of goods sold is expected to be 75% of sales. Company policy is to maintain ending merchandise inventory at 10% of the following month's cost of goods sold. Operating expenses are estimated to be as follows: 3. 4 Sales salaries Advertising Delivery expense Sales commissions $31,500 per month 6% of monthly sales 2 % of monthly sales 5 % of monthly sales $5,630 per month Rent expense Depreciation $910 per month Utilities $620 per month Insurance $520 per month 5. Interest expense is $2,000 per month. Income taxes are estimated to be 30% of income before income taxes. (a) 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 Months of May and June, 2020 May June Budgeted Cost of Goods Sold 960000 $ 1008000 Add V: Desired Ending Merchandise Inventory 720000 756000 Total 1680000 1764000 Less V Beginning Merchandise Inventory -720000 -756000 Required Merchandise Purchases 960000 1008000 eTextbook and Media