Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable...
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Accounting
Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable during each month are expected to be: May, $1,500,000; June, $1,350,000; July, $1,400,000; and August, $1,300,000 May 31 June 30 July 31 August 31 Accounts Merchandise Payable Inventory $120,000 $230,000 120,000 500,000 200,000 100,000 160,000 320,000 August (1) Compute the budgeted amounts of merchandise purchases. Budgeted amounts: June July Ending accounts payable Payments on account Subtotal Beginning accounts payable Purchases August (2) Compute the budgeted amounts of cost of goods sold. Budgeted amounts: June July Beginning inventory Purchases Cost of goods available for sale Ending inventory (500,000) (100,000) Cost of goods sold (320,000)
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