The budget committee of Vaughn Company collects the following data for its San Miguel Store in preparing budgeted income

statements for May and June $2022.$

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.

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:

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.

eTextbook and Media

Prepare budgeted multiple$-$step income statements for each month in columnar form. Show in the statements the details of cost

of goods sold.

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