Budgeting Exercise 1: Prepare budgeted income statement Representatives ofthe various departments of Go Sports have assembled the following data

Budgeting Exercise 1: Prepare budgeted income statement Representatives ofthe various departments of Go Sports have assembled the following data . As the business manager, you must prepare the budgeted income statements for August and September 2009. a. Sales in July were $196,000. You forecast that monthly sales will increase 3% in August and 2% in September. b. Go Sports tries to maintain inventory of $50,000 plus 20 % of sales budgeted for the following month. Monthly purchases average 60% of sales revenue in that same month. Actual inventory on July 31 is $90,000. Sales budgeted for October are $220,000. c. Monthly salaries amount to $15,000. Sales commissions equal 6% of sales for that month. Combine salaries and commissions into a single figure. (1. Other monthly expenses are: Rent expense ...................................... $13,000 paid as incurred Depreciation expense ............................. $4,000 Insurance expense ................................. $1,000, expiration of prepaid amount Income tax ......................................... 30% ofo eratin income P g Prepare Go Sports' budgeted income statements for August and September. Show cost of goods sold computations. Round all amounts to the nearest $1,000 . For example, budgeted August sales are $202,000 ($196,000 x 1.03) and September sales are $206,000 ($202,000 x 1.02).