The budget committee of Widner Company collects the following data for its West- wood Store in preparing budgeted income statements for July and August 2017.

P9_5B The budget committee of widner Company collects the following data for its West- wood Store in preparing budgeted income statements for July and August 2017. 1. Expected sales: July $400,000, August $450,000, September $500,000 2. Cost of goods sold is expected to be 65% of sales 3. Company policy is to maintain ending merchandise inventory at 15% of the following Prepare purchases and income statement budgets for a merchandiser. (LO 5), AP XLS month's cost of goods sold Operating expenses are estimated to be 4. Sales salaries Advertising Delivery expense Sales conmissions Rent expense Depreciation Utilities Insurance $50,000 per month 5% of monthly sales 2% of monthly sales 4% of monthly sales $3,000 per month $700 per month $500 per month $300 per month Interest expense is $3,000 per month. Income taxes are estimated to be 30% of income before income taxes 5. (a) Purchases: July $264,875 Instructions (a) Prepare the merchandise purchases budget for each month in columnar form (b) Prepare budgeted multiple-step income statements for each month in columnar form. August $297,375 (b) Net income: July $29,050 Show the details of cost of goods sold in the statements August $37,450