Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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, $1,500,000; July, $1,400,000; and August, $1,400,000
Accounts Payable | Merchandise Inventory | |||||
May 31 | $ | 150,000 | $ | 260,000 | ||
June 30 | 130,000 | 500,000 | ||||
July 31 | 300,000 | 300,000 | ||||
August 31 | 120,000 | 330,000 |
|
(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 | (500,000) | (300,000) | (330,000) |
Cost of goods sold | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started