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, $1,200,000; June, $1,400,000; July, $1,250,000; and August, $1,300,000

	Accounts Payable			Merchandise Inventory
May 31	$	190,000		$	230,000
June 30		150,000			400,000
July 31		200,000			200,000
August 31		170,000			390,000

(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 Cost of goods sold (400,000) (390,000) (200,000)