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Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $262,500 and...

Purchases and Cash Budgets
On July 1, MTC Wholesalers had a cash balance of $262,500 and accounts payable of $148,500. Actual sales for May and June, and budgeted sales for July, August, September, and October are:

Month Actual Sales Month Budgeted Sales
May $225,000 July $ 135,000
June 240,000 August 120,000
September 150,000
October 180,000

All sales are on credit with 75 percent collected during the month of sale, 20 percent collected during the next month, and 5 percent collected during the second month following the month of sale. Cost of goods sold averages 70 percent of sales revenue. Ending inventory is one-half of the next month's predicted cost of sales. The other half of the merchandise is acquired during the month of sale. All purchases are paid for in the month after purchase. Operating costs are estimated at $42,000 each month and are paid during the month incurred.

Required
Prepare purchases and cash budgets for July, August, and September.

Do not use a negative sign with your answers.

MTC Wholesalers
Purchases Budget
For the Months of July, August, and September
July August September
Inventory required, current sales
Desired ending inventory
Total inventory needs
Less beginning inventory
Purchases

Do not use a negative sign with your answers.

MTC Wholesalers
Cash Budget
For the Months of July, August, and September
July August September
Cash balance, beginning
Cash receipts
Current month's sales
Previous month's sales
Sales two months prior
Total receipts
Cash available
Cash disbursements:
Purchases
Operating costs
Total disbursements
Cash balance, ending

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