Budgeting: A process to prepare statement that represents financial data for the future periods is called budgeting. It is used for evaluating the difference of the planned estimates and actual amounts. Direct materials budget: The direct materials purchase budget is a kind of operating budget which determines the quantity of direct materials that should be purchased, so that the budgeted production and the need of inventory is met. This budget also determines the cost of purchase of the direct materials. Budgeted Income Statement : Budgeted income statement summarize the company’s financial activities for a particular period of time. It predicts the expected income and expenses which will occur from operating and non-operating activities of the business. To determine: Budgeted merchandise purchase for June.

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Chapter 23, Problem 23.20E

(a)

To determine

Budgeting: A process to prepare statement that represents financial data for the future periods is called budgeting. It is used for evaluating the difference of the planned estimates and actual amounts.

Direct materials budget: The direct materials purchase budget is a kind of operating budget which determines the quantity of direct materials that should be purchased, so that the budgeted production and the need of inventory is met. This budget also determines the cost of purchase of the direct materials.

Budgeted Income Statement: Budgeted income statement summarize the company’s financial activities for a particular period of time. It predicts the expected income and expenses which will occur from operating and non-operating activities of the business.

To determine: Budgeted merchandise purchase for June.

(b)

To determine

To prepare: The budgeted multiple-step income statement for June through gross profit.

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