The budget committee of Vaughn 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 month's cost of goods sold. 4. Operating expenses are estimated to be as follows: Sales salaries $30,400 per month Advertising 6 % of monthly sales Delivery expense 2 % of monthly sales Sales commissions 5 % of monthly sales Rent expense $5,290 per month Depreciation $830 per month Utilities $700 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. VAUGHN COMPANY San Miguel Store Merchandise Purchases Budget For the Months of May and June, 2022 May June Budgeted Cost of Goods Sold 840,000 $ 882,000 Add : Desired Ending Merchandise Inventory v 88,200 92,610 Total 928,200 974,610 Less Beginning Merchandise Inventory 84,000 i 88,200 i Required Merchandise Purchases $ 844,200 $ 886,410 Prepare budgeted multiple-step income statements for each month in columnar form. Show in the statements the details of cost of goods sold. VAUGHN COMPANY San Miguel Store Budgeted Income Statement May June $ $ > v > > > > > > A " > >