In May 2017, the budget committee of Grand Stores assembles the following data i

Question

In May 2017, the budget committee of Grand Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. 1. Expected sales: June $507,300, July $608,800. 2. Cost of goods sold is expected to be 75% of sales. 3. Desired ending merchandise inventory is 30% of the following (next) month’s cost of goods sold. 4. The beginning inventory at June 1 will be the desired amount.

(b)

Prepare the budgeted multiple-step income statement for June through gross profit.

GRAND STORES
Budgeted Income Statement
June 30, 2017For the Month Ending June 30, 2017For the Quarter Ending June 30, 2017EAT_1415708572723_1_836178018718102

Units to Be ProducedTotal Materials RequiredRequired Merchandise PurchasesBeginning Merchandise InventoryExpected SalesBudgeted Cost of Goods SoldBudgeted Gross ProfitDesired Ending Merchandise InventoryBudgeted Cost of Goods Available for SaleDirect Materials PurchasesEAT_1417779192133_1_7746723773111954

$

Total Materials RequiredExpected SalesBudgeted Cost of Goods SoldRequired Merchandise PurchasesBudgeted Gross ProfitDesired Ending Merchandise InventoryBudgeted Cost of Goods Available for SaleBeginning Merchandise InventoryDirect Materials PurchasesUnits to Be ProducedEAT_1417779192133_1_193373877369647

Budgeted Cost of Goods SoldExpected SalesDesired Ending Merchandise InventoryBeginning Merchandise InventoryRequired Merchandise PurchasesBudgeted Gross ProfitBudgeted Cost of Goods Available for SaleDirect Materials PurchasesUnits to Be ProducedTotal Materials Required Units to Be ProducedTotal Materials RequiredDirect Materials PurchasesExpected SalesBudgeted Cost of Goods SoldBudgeted Gross ProfitBeginning Merchandise InventoryDesired Ending Merchandise InventoryBudgeted Cost of Goods Available for SaleRequired Merchandise PurchasesEAT_1417779192133_1_63264121695303 Expected SalesBeginning Merchandise InventoryUnits to Be ProducedTotal Materials RequiredBudgeted Cost of Goods Available for SaleDesired Ending Merchandise InventoryBudgeted Gross ProfitDirect Materials per UnitDirect Materials PurchasesRequired Merchandise Purchases Budgeted Cost of Goods Available for SaleDirect Materials per UnitTotal Materials RequiredBudgeted Gross ProfitBeginning Merchandise InventoryDesired Ending Merchandise InventoryExpected SalesDirect Materials PurchasesRequired Merchandise PurchasesUnits to Be Produced Direct Materials PurchasesRequired Merchandise PurchasesBudgeted Cost of Goods Available for SaleBeginning Merchandise InventoryUnits to Be ProducedExpected SalesTotal Materials RequiredBudgeted Cost of Goods SoldBudgeted Gross ProfitDesired Ending Merchandise Inventory

Desired Ending Merchandise InventoryExpected SalesBudgeted Cost of Goods Available for SaleDirect Materials PurchasesBudgeted Gross ProfitRequired Merchandise PurchasesBudgeted Cost of Goods SoldBeginning Merchandise InventoryUnits to Be ProducedTotal Materials Required

Explanation / Answer

Answer:

June July Particulars In$ In$ Sales Revenue    5,07,300 608800 Cost of goods sold (A)    3,80,475 4,56,600 (Sales*75%) Add: Closing Inventory (B) 1,36,980 July COGS*30%) Less: Beginning inventory in June 1 © 114142.5 (June COGS*30%) Purchases budgeted in June (A+B -C) 4,03,313

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