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Ahmed Company purchases all merchandise on credit. It recently budgeted the month-end accounts payable balances...

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Accounting

Ahmed Company purchases all merchandise on credit. It recently budgeted the month-end accounts payable balances and merchandise inventory balances below. Cash payments on accounts payable during each month are expected to be May, $1,400,000; June, $1,400,000; July, $1,400,000; and August, $1,500,000

Accounts Payable Merchandise Inventory
May 31 $ 180,000 $ 230,000
June 30 190,000 300,000
July 31 200,000 500,000
August 31 120,000 400,000
(1) Compute the budgeted amounts of merchandise purchases.
Budgeted amounts: June July August
Ending accounts payable
Payments on account
Subtotal 0 0 0
Beginning accounts payable
Purchases $0 $0 $0
(2) Compute the budgeted amounts of cost of goods sold.
Budgeted amounts: June July August
Beginning inventory
Purchases
Cost of goods available for sale
Ending inventory (300,000) (500,000) (400,000)
Cost of goods sold

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