In September 2015, the budget committee of Ahmad Company assembles the following data:
1. Expected Sales
October $900,000
November 850,000
December 800,000
2. Cost of goods sold is expected to be 60% of sales.
3. Desired ending merchandise inventory is 20% of the next month's cost of goods sold.
4. The beginning inventory at October 1 will be the desired amount.
Required:
Prepare the budgeted income statement for October through gross profit on sales, including a cost of goods sold schedule.