Question

E9-35A (similar to) luery Comer Shoppe a local convenience tore with he ftowing intomation M O he oon to vew he ntmaton) Read the eurements Requirement 1. Prepare the sales budget for November and December. Slattery Comer Sheppe Sales Budget For the Months of Nevember and December Nevember December Cash sales Credt sales Total sales Data Table Octeber sales were S200.000. • Sales are projected to go up by 10% in November rom the October sales) anether 25% in December (hom the November sales) and then retum to the October level in January. . 20% of sales are made in cash, while the remaining B0% are paid by oredit or debt cards. The credt card companies and banks (debit card isuers) chargea t1% transacton fee, and depost the net amount (sales price less the transaction fee) in the store's bank account daly • Satery Comer Shoppes groes profit is 40% of s sales revenue. • For the next several months. he store wants to maintain an ending merchandise inventory equal to $20.000 10% of the next mons cost of goods sold. The September 30 inventory was 132.000 . Expected monthly operating epenses include • Wages of store workers are S9,000 per month Ues epense of Se00 in November and $1,400 in December Property tax expense of $2.700 per month Property and labity insurance epense of $1,100 pe month • Depreciation epense of .000 per month • Transaction fees, as stated atbove, are 1% of credit and debit card sales Requirements Prepare the folowing budgets for November and December 1. Sales budget 2 Cost of goods sokd, inventory, and purchases budget 3. Operating expense budget 4. Budgeted income statement Print Done Print Done

Answer 1

1.

	November	December
Total sales	220000	275000
Cash sales(20%)	44000	55000
Credit sales(80%)	176000	220000

2.

	November	December
Ending inventory	36500	32000
Add: Cost of goods sold	132000	165000
Less: beginning inventory	33200	36500
Purchases	135300	160500

3.

	November	December
Wage expense	9000	9000
Utilities expense	800	1400
Property tax expense	2700	2700
Property and liability insurance expense	1100	1100
Depreciation expense	5000	5000
Credit/Debit card fees expense	1760	2200
Total operating expenses	18600	19200

4.

	November	December
Sales revenue	220000	275000
Less: Cost of goods sold	132000	165000
Gross Profit	88000	110000
Less: Operating expenses	18600	19200
Net Income	69400	90800