Problem: Preparing an operating budget
Thumbtack's March 31, 2012, budgeted balance sheet follows:
The budget committee of Thumbtack Office Supply has collected the following data.
I. Sales in April were $40,000. You predict that monthly sales will enhance 2% over April's sales in May. June's sales will enhance 4% over April's sales. July's sales will enhance 20% over April's sales. Collections are 80% in the month of sale as well as 20% in the month following sale.
II. Thumbtack maintains stock of $11,000 plus 25% of the COGS budgeted for the following month. COGS = 50% of sales income. Purchases are paid 30% in the month of purchase and 70% in the month following the purchase.
III. Monthly wages amount to $7,000. Sales commissions equal 5% of sales for that month. Wages and commissions are paid 30% in the month incurred and 70% in the following month.
Requirements
• Prepare Thumbtack's sales budget for April and May, 2012. Round all amounts to the nearest $1.
• Prepare Thumbtack's inventory, purchases, and cost of goods sold budget for April and May.
• Prepare Thumbtack's operating expenses budget for April and May.
• Prepare Thumbtack's budgeted income statement for April and May.
The response should include a reference list. Using one-inch margins, Times New Roman 12 pnt font, double-space and APA style of writing and citations.