Question textPrepare a budgeted income statement for Toys 4 You for July 2022 using the following information: – Cash sales for July are expected to be $16,500 – Toys for 4 expect to Credit sales to be twice the amount of cash sales. – All toys are marked up by 150% of cost price. – Employees work 4.2 weeks during July and the weekly wage expense is $1,200. – Monthly costs include: Online advertising is $250 per month, Security and cleaning costs $280 per month, Insurance which costs $12,000 for the full year, Telephone and Data phone plans of $240 per month and Depreciation of shop fittings at 15% per annum (cost $10,000), straight-line method. – Owner drawings are $3,000 each month – Creditors are paid in the month after purchase gaining a 5% discount. Creditors balance at 1 July is $6,900. – To encourage early receipt from credit customers a 2% discount is offered on amounts paid within 20 days. It is expected customers with an accumulated balance of $15,000 will pay in credit terms during July 2022. (Do not include $ , or decimal places in your amounts)Toys 4 You Budgeted Income Statement for the month ending 31 July 2022 [table] Cash sales | Answer 1 Question 1 | Credit Sales | Answer 2 Question 1 | Answer 3 Question 1 Less Cost of Sales | | Answer 4 Question 1 Answer 5 Question 1 Gross ProfitNet Profit | | Answer 6 Question 1 Other Income | | Answer 7 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | | Answer 8 Question 1 Less Other Expenses (Select correct expenses in order per the drop down list) | | Answer 9 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 10 Question 1 | Answer 11 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 12 Question 1 | Answer 13 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 14 Question 1 | Answer 15 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 16 Question 1 | Answer 17 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 18 Question 1 | Answer 19 Question 1 AdvertisingExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 20 Question 1 | Answer 21 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 22 Question 1 | Answer 23 Question 1 Answer 24 Question 1 Gross ProfitNet Profit | | Answer 25 Question 1 [/table]

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{ "reasoning": "Question restatement: You are asked to prepare a budgeted income statement for Toys 4 You for July 2022 using the provided data, including cash and credit sales, cost of sales based on a 150% markup, various monthly expenses, depreciation, drawings, and discount terms for receipts from customers and payments to creditors. The input includes a large series of fill-in values that appear to represent the expected line items in the statement. Since the prompt provides numbers rather than a set of discrete multiple-choice options, I will analyze each listed item in the given answer array and explain why it is correct or incorrect, along with the underlying reasoning and any necessary calculations." - Cash sales and credit sales basics: - The statement lists cash sales of 16500. Given the instruction that credit sales are twice cash sales, the expected credit sales would be 33000. This implies total sales of 49500 (16500 + 33000). The calculation aligns with the markup policy and the subsequent computation of cost of sales, as explained next. - The answer set shows 33000 as the credit sales value and 49500 as the total sales. This is consistent: total sales = cash sales + credit sales = 16500 + 33000 = 49500. - Cost of sales calculation and gross profit: - With a markup of 150% on cost, the selling price equals cost multiplied by 2.5 (since a 150% markup means you add 150% of cost to cost, giving selling price = 1.0C + 1.5C = 2.5C). Therefore, Cost of Sales (COGS) can be derived as Sales / 2.5. - For total sales of 49500, COGS = 49500 / 2.5 = 19800. The answer set shows 19800 labeled as Cost of Sales, which is correct. - Gross Profit is then Sales minus COGS: 49500 − 19800 = 29700. The provided value 29700 for Gross Profit matches this calculation, so that line item is correct. - Net profit and expense aggregation (approach and verification): - Net profit results from subtracting all operating expenses (plus any depreciation and drawings, if considered in the period) from gross profit, and accounting for any other income or discount effects as specified. - The given line item for Net Profit is 18290. To verify, sum the expenses that would reasonably appear in a monthly budget: Wages, Advertising, Insurance, Security and Cleaning, Telephone, Depreciation (non-cash, but included in NI if requested), Drawings (owner drawings are typically not expensed in the income statement but drawn from equity; some budgets include drawings as a deduction from net income, depending on the format). If we use the values implied by the answer array: - Wages: 5040 (calculated as weekly wage expense 1200 × 4.2 weeks) - Advertising: 300 (listed as an advertising expense; note there is also a line for Online advertising of 250 per month in the data; however, the supplied answer block lists 300 for Advertising Expense, which would be a potential discrepancy to resolve with the source data) - Insurance expense: 1000 (12,000 per year ÷ 12 months) - Security and Cleaning: 280 - Telephone: 240 - Depreciation Expense: 125 (calculated as 15% per annum on 10,000 cost, straight-line; monthly depreciation = 1500/12 = 125......Login to view full explanation

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