Question

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

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

 Accounts Payable Merchandise Inventory May 31 \$ 180,000 \$ 250,000 June 30 160,000 300,000 July 31 300,000 400,000 August 31 180,000 300,000
 (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) (400,000) (300,000) Cost of goods sold

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