**Budget Preparation for Concord Stores: Merchandise Purchases and Income Statement**In May 2022, the budget committee of Concord Stores assembles the following data in preparation for budgeted merchandise purchases for the month of June.1. **Expected Sales:** - June: $430,000 - July: $516,0002. **Cost of Goods Sold:** - Expected to be 75% of sales.3. **Desired Ending Merchandise Inventory:** - 30% of the following (next) month’s cost of goods sold.4. **Beginning Inventory on June 1:** - Will be the desired amount.### (a) Merchandise Purchases Budget Calculation**Concord Stores Merchandise Purchases Budget** *For the Month Ending June 30, 2022*- **Budgeted Cost of Goods Sold:** $322,500- **Add: Desired Ending Merchandise Inventory:** $116,100- **Total:** $438,600- **Less: Beginning Merchandise Inventory:** $96,750- **Required Merchandise Purchases:** $341,850### (b) Budgeted Income Statement Preparation*Prepare the budgeted multiple-step income statement for June through gross profit.***Concord Stores Budgeted Income Statement (Partial)**- **(Sales Amount):** `$`- **(Cost of Goods Sold):** `$`- **(Gross Profit):** `$`*Note: Further details for the income statement fields are provided as placeholders for inputting the relevant amounts.*

Income statement is a financial statement that shows profitability, total revenue and total…

In May 2022, the budget committee of Concord Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. 1. 2. 3. 4. Expected sales: June $430,000, July $516,000. Cost of goods sold is expected to be 75% of sales. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold. The beginning inventory at June 1 will be the desired amount.

In May 2022, the budget committee of Concord Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June. 1. 2. 3. 4. Expected sales: June $430,000, July $516,000. Cost of goods sold is expected to be 75% of sales. Desired ending merchandise inventory is 30% of the following (next) month's cost of goods sold. The beginning inventory at June 1 will be the desired amount.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

**Budget Preparation for Concord Stores: Merchandise Purchases and Income Statement**

In May 2022, the budget committee of Concord Stores assembles the following data in preparation for budgeted merchandise purchases for the month of June.

1. **Expected Sales:**
- June: $430,000
- July: $516,000

2. **Cost of Goods Sold:**
- Expected to be 75% of sales.

3. **Desired Ending Merchandise Inventory:**
- 30% of the following (next) month’s cost of goods sold.

4. **Beginning Inventory on June 1:**
- Will be the desired amount.

### (a) Merchandise Purchases Budget Calculation

**Concord Stores Merchandise Purchases Budget**
*For the Month Ending June 30, 2022*

- **Budgeted Cost of Goods Sold:** $322,500
- **Add: Desired Ending Merchandise Inventory:** $116,100
- **Total:** $438,600
- **Less: Beginning Merchandise Inventory:** $96,750
- **Required Merchandise Purchases:** $341,850

### (b) Budgeted Income Statement Preparation

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

**Concord Stores Budgeted Income Statement (Partial)**

- **(Sales Amount):** `$`
- **(Cost of Goods Sold):** `$`
- **(Gross Profit):** `$`

*Note: Further details for the income statement fields are provided as placeholders for inputting the relevant amounts.*

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