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itrus 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: 1. Expected monthly sales for April, May, June, and July are $220,000, $190,000, $310,000, and $90,000, respectively. 2. Cost of goods sold is 30 percent of expected sales. 3. CGC's desired ending inventory is 20 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: Salaries: $30,000. Delivery expense: 4 percent of monthly sales. Rent expense on the warehouse: $4,500. Utilities: $800. Insurance: $175. Other expenses: $260. 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.

itrus 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: 1. Expected monthly sales for April, May, June, and July are $220,000, $190,000, $310,000, and $90,000, respectively. 2. Cost of goods sold is 30 percent of expected sales. 3. CGC's desired ending inventory is 20 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: Salaries: $30,000. Delivery expense: 4 percent of monthly sales. Rent expense on the warehouse: $4,500. Utilities: $800. Insurance: $175. Other expenses: $260. 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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itrus 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: 1. Expected monthly sales for April, May, June, and July are $220,000, $190,000, $310,000, and $90,000, respectively. 2. Cost of goods sold is 30 percent of expected sales. 3. CGC's desired ending inventory is 20 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: Salaries: $30,000. Delivery expense: 4 percent of monthly sales. Rent expense on the warehouse: $4,500. Utilities: $800. Insurance: $175. Other expenses: $260. 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. CURTIUS GIRL COMPANY BUDGETED INCOME STATEMENT FOR THE MONTH ENDING BUDGETED GROSS MARGIN BUDGETED NET OPERATING INCOME APRIL 30 MAY 31 JUNE 30
Transcribed Image Text:itrus 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: 1. Expected monthly sales for April, May, June, and July are $220,000, $190,000, $310,000, and $90,000, respectively. 2. Cost of goods sold is 30 percent of expected sales. 3. CGC's desired ending inventory is 20 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: Salaries: $30,000. Delivery expense: 4 percent of monthly sales. Rent expense on the warehouse: $4,500. Utilities: $800. Insurance: $175. Other expenses: $260. 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. CURTIUS GIRL COMPANY BUDGETED INCOME STATEMENT FOR THE MONTH ENDING BUDGETED GROSS MARGIN BUDGETED NET OPERATING INCOME APRIL 30 MAY 31 JUNE 30
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