The budget committee of SUppar Company collects the following data for its San M
ID: 2421428 • Letter: T
Question
The budget committee of SUppar Company collects the following data for its San Miguel store in preparing budgeted income statements for May and June 2017.
1. sales for may are expected to be 800,000. sales in June and July are expected to be 5% higher than the preceeding month.
2. Cost of good sold is expecte to be 75% of sales
3. Company policy is to maintain ending merchandise inventory at 10% of the following months cost of goods sold.
4. Operating expenses are estimated to be as follows:
sales
interest expense is 2,000 per month. Income taxes are estimated to be 30% of income before income taxes.
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. Show in the statements the details of cost of good sold.
sales
35,000 per month advertising 6% of monthly sales delivery expense 2% of monthly sales sales commission 5% of monthly sales rent expense 5,000 per month depreciation 800 per month utilites 600 per month insurance 500 per monthExplanation / Answer
The budget committee of SUppar Company collects the following data for its San Miguel store in preparing budgeted income statements for May and June 2017.
1. sales for may are expected to be 800,000. sales in June and July are expected to be 5% higher than the preceeding month.
3. Company policy is to maintain ending merchandise inventory at 10% of the following months cost of goods sold.
sales
35,000 per month
advertising 6% of monthly sales
delivery expense 2% of monthly sales
sales commission 5% of monthly sales
rent expense 5,000 per month
depreciation 800 per month
utilites 600 per month
insurance 500 per month
interest expense is 2,000 per month. Income taxes are estimated to be 30% of income before income taxes.
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. Show in the statements the details of cost of good sold.
a) prepare the merchandise purchases budget for each month in columnar form.
Sales June and July are expected to be 5% higher than the preceeding month.
Ending Inventory10% of the following months cost of goods sold.
b) prepare budgeted multiple-step income statements for each month in columnar form. Show in the statements the details of cost of good sold.
The budget committee of SUppar Company collects the following data for its San Miguel store in preparing budgeted income statements for May and June 2017.
1. sales for may are expected to be 800,000. sales in June and July are expected to be 5% higher than the preceeding month.
2. Cost of good sold is expecte to be 75% of sales3. Company policy is to maintain ending merchandise inventory at 10% of the following months cost of goods sold.
4. Operating expenses are estimated to be as follows:
sales
35,000 per month
advertising 6% of monthly sales
delivery expense 2% of monthly sales
sales commission 5% of monthly sales
rent expense 5,000 per month
depreciation 800 per month
utilites 600 per month
insurance 500 per month
interest expense is 2,000 per month. Income taxes are estimated to be 30% of income before income taxes.
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. Show in the statements the details of cost of good sold.
a) prepare the merchandise purchases budget for each month in columnar form.
SUppar Company Merchandise Purchases Budget For the months May and June,2017 May June Budgeted Cost of Good Sold(75% of Sales) $600,000 $630,000 Add: Desired ending Merchandise Inventory $63,000 $66,150 Total $663,000 $696,150 Less: Beginning Merchandise Inventory ($60,000) ($63,000) Required Merchandise Purchase $603,000 $633,150 Working Notes May June JulySales June and July are expected to be 5% higher than the preceeding month.
$800,000 $840,000 $882,000 May June July Cost of Good Sold $600,000 $630,000 $661,500Ending Inventory10% of the following months cost of goods sold.
April May June $60,000 $63,000 $66,150b) prepare budgeted multiple-step income statements for each month in columnar form. Show in the statements the details of cost of good sold.
SUppar Company Budgeted Income Statement For the months May and June,2017 Sales $800,000 $840,000 Less: Cost of Good Sold Beginning Inventory $60,000 $63,000 Add: Purchase $603,000 $633,150 Less: Ending Inventory ($63,000) ($66,150) Cost of Good Sold ($600,000) ($630,000) Gross profit $200,000 $210,000 Less: Operating Expenses Sales Expenses ($35,000) ($35,000) Advertising Expenses 6% of monthly sales ($48,000) ($50,400) Delivery Expenses 2% of monthly sales ($16,000) ($16,800) Sales Commissin 5% of Monthly Sales ($40,000) ($42,000) Rent expense ($5,000) ($5,000) Depreciation ($800) ($800) Uitilities ($600) ($600) Insurance ($500) ($500) EBIT $54,100 $58,900 Less: Interest ($2,000) ($2,000) EBT $52,100 $56,900 Less: Income Tax 30% ($15,630) ($17,070) Net Income $36,470 $39,830Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.