The budget committee of Urbina Company has collected the following data for its Eastwood Store in preparing budgeted income statements for July and August $2022.$

Expected sales: July $$400,000,$ August $$450,000,$ September $$500,000.$ The cost of goods solu $1$ expected to be $60\%$ of sales. Ending merchandise inventory is maintained at $20\%$ of the following month's cost of goods sold.

Operating expenses are estimated to be as follows

Sales salaries $$50,000$ per month

Rent expense $$3,000$ per month

Advertising $4\%$ of monthly sales

Depreciation $700$ per month

Delivery expense $2\%$ of monthly sales

Utilities $500$ per month

Sales commissions $3\%$ of monthly sales

Insurance $300$ per month

Income taxes are estimated to be $30\%$ of the income from operations.

Instructions

Prepare the merchandise purchases budget, using columns for each month.

Prepare a budgeted income statement, using columns for each month. Show details in the statement for the cost of goods sold.

Calculate purchases and disbursements for merchandiser