Question

PLS anwer all parts

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, $1,100,000; June, $1,400,000; July, $1,250,000; and August, $1,300,000

	Accounts Payable			Merchandise Inventory
May 31	$	150,000		$	270,000
June 30		140,000			300,000
July 31		200,000			500,000
August 31		200,000			380,000

(1) Compute the budgeted amounts of merchandise purchases.
Budgeted amounts:	June	July	August
Ending accounts payable
Payments on account
Subtotal
Beginning accounts payable
Purchases
(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)	(380,000)
Cost of goods sold

Answer 1

Ans.(1)	Computation of budgeted amonts of merchandise purchase:
	Budgeted amounts			June	July	August
	Ending accounts payable			140,000	200,000	200,000
	Payments on account			1,400,000	1,250,000	1,300,000
	Subtotal			$ 1,540,000	$ 1,450,000	$ 1,500,000
	Beginning accounts payable			150,000	140,000	200,000
	Purchases			$ 1,390,000	$ 1,310,000	$ 1,300,000
Ans(2)	Computation of budgeted amonts of cost of goods sold:
	Budgeted amounts			June	July	August
	Begininning inventory			270,000	300,000	500,000
	Purchases			1,390,000	1,310,000	1,300,000
	Cost of goods available for sale			$ 1,660,000	$ 1,610,000	$ 1,800,000
	Ending Inventory			300,000	500,000	380,000
	Cost of goods sold			$ 1,360,000	$ 1,110,000	$ 1,420,000