Question

Part V Part A In September 2017, the budget committee of Fidelity Company assembled the following data: 1. Expected Sales October $400,000 November 420,000 December 450,000 2. Cost of goods sold is expected to be 45% of sales. 3. Purchases for October are $180,900. 4. Desired ending merchandise inventory is 10% of the next month's cost of goods sold. Required: Prepare the budgeted income statement for October through gross profit on sales, including a cost of goods sold schedule

Answer 1

Requirement; Budgeted income statement for October 2017

Budgeted Income Statement for October 2017
Sale	$        400,000
Less:
Cost of Goods sold (as calculated below)	$        180,000
Gross profit	$        220,000

Requirement: Cost of Goods sold Schedule

Cost of Goods sold Schedule
Opening Inventory	$          18,000
(10% of 45% of Oct sale $400000)
Add: Purchase	$        180,900
Less: Ending Inventory
(10% of 45% of Nov sale $420000)	$          18,900
	$        180,000

Hit Thumbs up if satisfied

Best efforts are made to give you best answer but still some time unknowingly some error may happen if there is any problem with the solution let me know I will correct it

Thank you