Hi-Value Products Company Is Creating an Operating Budget for the 3^rd

Hi-value Products Company is creating an operating budget for the 3^rd quarter. Please review the following budgets:
$\begin{array}{|l|c|c|c|}\hline\text { Sales Budget }&\text { Jul } & \text { Aug } & \text { Sep } \\\hline \text { Cash sales: } 75 \% & \$ 75,000 & \$ 90,000 &\$120,000\\\hline \text { Credit sales: } 25 \% & 25,000 & 30,000 &40,000\\\hline \text { Total sales } & \$ 100,000 & \$ 120,000 & \$ 160,000\\\hline\\\hline\text { Inventory, Purchases and COGS. Budget }&\text { Jul } & \text { Aug } & \text { Sep }\\\hline \text { Cost of goods sold } & \$ 60,000 & \$ 72,000 & \$ 96,000 \\\hline \text { Desired ending inventory } & 38,000 & 50,000 & 62,000 \\\hline \text { Total inventory required } & 98,000 & 122,000 & 158,000 \\\hline \text { ess Beginning inventory } & (50,000) & (38,000) & (50,000 \\\hline \text { Purchases } & \$ 48,000 & \$ 84,000 & \$ 108,000 \\\hline \end{array}$
$\begin{array}{|l|r|r|r|}\hline\text { Operating Expenses Budget } & \text { Jul } & \text { Aug } & \text { Sep } \\\hline \text { Variable operating expenses: } & & & \\\hline \text { Misc. expense }(10 \% \text { of sales) } & \$ 10,000 & \$ 12,000 & \$ 16,000 \\\hline \text { Total variable expenses } & 10,000 & 12,000 & 16,000 \\\hline \text { Fixed operating expenses: } & & & \\\hline \text { Salary expense } & 12,000 & 12,000 & 12,000 \\\hline \text { Rent expense } & 8,000 & 8,000 & 8,000 \\\hline \text { Depreciation expense } & 5,600 & 5,600 & 5,600 \\\hline \text { Misc. expense(fixed portion) } & 4,200 & 4,200 & 4,200 \\\hline \text { Total fixed expenses } & 29,800 & 29,800 & 29,800 \\\hline \text { Total operating expenses } & \$ 39,800 & \$ 41,800 & \$ 45,800 \\\hline\end{array}$

Using the format below, please prepare a budgeted income statement.
$$\begin{array} { | l | l | l | l | } \hline \text { Budgeted Income Statement } & \text { Jul } & \text { Aug } & \text { Sep } \\\hline \text { Sales revenue } & & & \\\hline \text { Cost of goods sold } & & & \\\hline \text { Gross profit } & & & \\\hline \text { Variable operating expenses: } & & & \\\hline \text { Misc. expense } & & & \\\hline \text { Total variable expenses } & & & \\\hline \text { Contribution margin } & & & \\\hline \text { Fixed operating expenses } & & & \\\hline \text { Salary expense } & & & \\\hline \text { Rent expense } & & & \\\hline \text { Depreciation expense } & & & \\\hline \text { Misc. expense(fixed portion) } & & & \\\hline \text { Total fixed expenses } & & & \\\hline \text { Operating income/(loss) } & & & \\\hline \text { Interest expense } & & & \\\hline \text { Net income/(loss) } & & & \\\hline\end{array}$$