The budget committee of Omaha Office Supply Co. has assembled the following data. As the business manager, you must prepare the budgeted income statements for May and June 2008. Sales budget information: Sales in April were $42,100. You forecasr that monthly sales will increase 2.0% in May and 2.4% in June. Inventory, purchases, and cost of goods sold budget information: Omaha maintains inventory of S9,000 plus 25% of the sales revenue budgeted for the following month. Monthly purchases average 50% of sales revenue in that same month. Acrual inventory on April 30 is S14,000. Sales budgeted for July are $42,400 Operating expense budget information a. Monthly salaries amount to $4,000. Sales commissions equal 4% of sales for that month. Combine salaries and commissions into a single figure. b. Other monthly expenses are: S 600 Depeeciation expense tr ürarice expenie Requirements 1. Prepare the inventory, purchases, and cost of goods sold bud- get, and the operating expenses budget for May and June (pp. 1109-1110) 2. Prepare Omaha\'s budgered income stacements for May and June Round all amounts to the nearest $100.(Round amounts ending in $50 or more upward, and amounts ending in less than $50 downward.) For example, budgeted May sales are $42,900 ($42,100 × 1.02), and June sales are $43,900 ($42,900 × 1.024). Solution Particulars April May June July Sales 42,100.00 42,900.00 43,900.00 42,400.00 Inventory to be maintained 19,700.00 20,000.00 19,600.00 Purchases 21,100.00 21,500.00 22,000.00 21,200.00 Actual Inventory ending 14,000.00 Salaries & Commission 5,700.00 5,700.00 5,800.00 5,700.00 Rent 3,000.00 3,000.00 3,000.00 3,000.00 Depreciation 600.00 600.00 600.00 600.00 Insurance 200.00 - - - Opening Inventory 19,500.00 Calculated by adding 9000 to 25% of April Sales Inventory - April Beginning 19,500.00 COGS 20,900.00 Bal Fig Purchases 21,100.00 Ending 19,700.00 Inventory - May Beginning 19,700.00 COGS 21,200.00 Purchases 21,500.00 Ending 20,000.00 Inventory - June Beginning 20,000.00 COGS 22,000.00 Purchases 22,000.00 Ending 20,000.00 Operating Expenses Budget April May June Salaries & Commission 5,700.00 5,700.00 5,800.00 Budgeted Income Statement April May June Comments Sales 42,100.00 42,900.00 43,900.00 Less: COGS 20,900.00 21,200.00 22,000.00 Gross Profit 21,200.00 21,700.00 21,900.00 Less: Operating Expenses 5,700.00 5,700.00 5,800.00 Less: Monthly Exp Rent 3,000.00 3,000.00 3,000.00 Not an operating expense. Assumed as office rent. If it is factory should be treated as operating expense Depreciation 600.00 600.00 600.00 Not an operating expense Insurance 200.00 - - Assumed as one time expense since they said expiration of prepaid amount Total 11,700.00 12,400.00 12,500.00.