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Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 80% of sales. Its Inventory policy

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Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 80% of sales. Its Inventory policy calls for ending inventory at the end of each month to equal 10% of the next month's budgeted cost of goods sold. All purchases are on credit, and 30% of the purchases in a month is paid for in the same month. Another 20% is paid for during the first month after purchase, and the remaining 50% is paid for in the second month after purchase. The following seles 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 2 and 22A.3 for guidance, but note that budgeted sales are in dollars for this assignment.) October November (1) Compute the budgeted merchandise purchases for July August September, and October July August September Budgeted ending inventory Sales (estimated) Required evalo inventory Cost of goods sold (ostated) Required purchases $ 05 $ I 0 Conto the budgeted payments on accounts payable for September and foot Purchases paid in Purchases August September July purchase August purchase September purchase October Alter October October After October (2) Compute the budgotod payments on accounts payable for September and October Purchases paid in Purchases August September July purchases August purchases September purchases October purchases 0 (3) Compute the budgeted ending balances of accounts payable for September and October September Purchases % unpaid as of Amount unpaid as September 30 of September 30 July purchases August purchases September purchases September 30 budgeted accounts payable Sunpaid as of October Purchases Amount unpaid as October 31 of October 31 July purchases August purchases September purchases Odobe purchases O October 31 budgeted accounts payable

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