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, $1,450,000; July, $1,350,000; and August, $1,200,000

Accounts Merchandise Payable $130,000 230, 000 150, 000 400, 000 Inventory May 31 June 30 July 31 August 31 300, 000400, 000 110, 000 350, 000 (1) Compute the budgeted amounts of merchandise purchases. July Budgeted amounts: August June Ending accounts payable Payments on account Subtotal Beginning accounts payable Purchases (2) Compute the budgeted amounts of cost of goods sold. July Budgeted amounts: August June Beginning inventory Purchases Cost of goods available for sale (400,000) (400,000) Ending inventory (350,000) Cost of goods sold