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Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet across the United States. To keep costs down, CGC maintains a warehouse, but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: Expected monthly sales for April, May, June, and July are $300,000, $270,000, $390,000, and $170,000, respectively. Cost of goods sold is 45 percent of expected sales. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. Monthly operating expenses are estimated to be: Salaries: $38,000 Delivery expense: 7 percent of monthly sales Rent expense on the warehouse: $8,500 Utilities: $1,700 Insurance: $210 Other expenses: $310 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter.

Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet across the United States. To keep costs down, CGC maintains a warehouse, but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: Expected monthly sales for April, May, June, and July are $300,000, $270,000, $390,000, and $170,000, respectively. Cost of goods sold is 45 percent of expected sales. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. Monthly operating expenses are estimated to be: Salaries: $38,000 Delivery expense: 7 percent of monthly sales Rent expense on the warehouse: $8,500 Utilities: $1,700 Insurance: $210 Other expenses: $310 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet across the United States. To keep costs down, CGC maintains a warehouse, but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: Expected monthly sales for April, May, June, and July are $300,000, $270,000, $390,000, and $170,000, respectively. Cost of goods sold is 45 percent of expected sales. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. Monthly operating expenses are estimated to be: Salaries: $38,000 Delivery expense: 7 percent of monthly sales Rent expense on the warehouse: $8,500 Utilities: $1,700 Insurance: $210 Other expenses: $310 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter.
Transcribed Image Text:Citrus Girl Company (CGC) purchases quality citrus produce from local growers and sells the produce via the Internet across the United States. To keep costs down, CGC maintains a warehouse, but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: Expected monthly sales for April, May, June, and July are $300,000, $270,000, $390,000, and $170,000, respectively. Cost of goods sold is 45 percent of expected sales. CGC's desired ending inventory is 35 percent of the following month's cost of goods sold. Monthly operating expenses are estimated to be: Salaries: $38,000 Delivery expense: 7 percent of monthly sales Rent expense on the warehouse: $8,500 Utilities: $1,700 Insurance: $210 Other expenses: $310 Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter.
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