This Website Has Been Moved to a New Link


Widner Company 2014

Price: $2.50

The budget committee of Widner Company collects the following data for its Westwood
Store in preparing budgeted income statements for July and August 2014.

1. Expected sales: July $400,000, August $450,000, September $500,000.

2. Cost of goods sold is expected to be 65% of sales.

3. Company policy is to maintain ending merchandise inventory at 15% of the following
month’s cost of goods sold.

4. Operating expenses are estimated to be:

Sales salaries  $50,000 per month 
Advertising  5% of monthly sales 
Delivery expense  2% of monthly sales 
Sales commissions  4% of monthly sales 
Rent expense  $3,000 per month 
Depreciation  $700 per month 
Utilities  $500 per month 
Insurance  $300 per month 

5. Income taxes are estimated to be 30% of income from operations.

(a) Prepare the merchandise purchases budget for each month in columnar form.
(b) Prepare budgeted income statements for each month in columnar form. Show the
details of cost of goods sold in the statements

No comments:

Post a Comment