Question

Data Table a. Sales in April were $50,000. You forecast that monthly sales will increase 12% in May and an additional 4% in June b. Designer Dresses maintains inventory of $7.000 plus 30% of the sales revenues budgeted for the following month. Monthly purchases average 50% of sales revenue in that same month. Actual inventory on April 30 is $23,800. Sales budgeted for July are $70,000 c. Monthly salaries amount to $3,000. Sales commissions equal 10% of sales for that month. Combine salaries and commissions into a single figure. d. Other monthly expenses are as follows: Rent expense Depreciation expense nsurance expense income tax $2 200, paid as incurred $500 $200. expiration of prepaid amount 20% of operating income Print Done

Answer 1

		May	June
Beginning Inventory (A)		23800	24472
Purchases (B)		28000	29120
Cost of Goods available for sale (A+B) = C		51800	53592
Ending Inventory (D)		24472	28000
Cost of Goods sold (C-D)		27328	25592
Designer Dresses
Budgeted Income Statements
For the months Ended May 31 and June 30
		May		June
Sales Revenue		56000		58240
Cost of Goods sold		27328		25592
Gross Profit		28672		32648
Operating Expenses
- Salaries and commission expenses	8600		8824
- Rent Expense	2200		2200
- Depreciation Expense	500		500
- Insurance Expense	200	11500	200	11724
Operating Income		17172		20924
Income tax expense (20% of OI)		3434		4185
Net Income (loss)		13738		16739