Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 50% of sales. Its inventory policy calls for ending inventory in each month to equal 40% of the next months budgeted cost of goods sold. All purchases are on credit, and 20% of the purchases in a month is paid for in the same month. Another 10% is paid for during the first month after purchase, and the remaining 70% is paid for in the second month after purchase. The following sales budgets are set: July, $200,000; August, $140,000; September, $170,000; October, $125,000; and November, $115,000. (Hint: For part 1, refer to Exhibits 22A.1 and 22A.2 for guidance, but note that budgeted sales are in dollars for this assignment.)

Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost goods sold to equal 50% of sales. Its inventory policy calls for ending inventory in each month to equal 40% of the next month's budgeted cost of goods sold. All purchases are on credit, and 20% of the purchases in a month is paid for in the same month. Another 10% is paid for during the first month after purchase, and the remaining 70% is paid for in the second month after purchase. The following sales budgets are set: July, $200,000; August, $140,000; September, $170,000; October, $125,000; and November, $115,000. (Hint: For part 1, refer to Exhibits 22A.1 and 22A.2 for guidance, but note that budgeted sales are in dollars for this assignment) (1) Compute the budgeted merchandise purchases for July, August, September, and October July August September October November Budgeted ending inventory Required available inventory Required purchases (2) Compute the budgeted payments on accounts payable for September and October Purchases paid in Purchases August September October After October July purchases August purchases September purchases October purchases (3) Compute the budgeted ending balances of accounts payable for September and October % unpaid as of September 30 Amount unpaid as of September 30 September Purchases July purchases August purchases September purchases September 30 budgeted accounts payable % unpaid as of October 31 Amount unpaid as of October 31 October Purchases July purchases August purchases September purchases October purchases