Dawson Lighting sells lamps and had cost of goods sold during the month of January of $420,000. The company projects a 4 percent increase in cost of goods sold during February. The inventory balance as of January 31 is $32,000, and the desired ending inventory balance for the end of February is $ 38,000. Dawson Lighting pays cash to settle 60 percent of its purchases on account during the month of purchase and pays the remaining 40 percent in the month following the purchase. The accounts payable balance as of January 31 was $169,600.

Required:

1. Prepare the purchases budget and the cash payments budget for inventory purchases for February in a format similar to below.

Inventory Purchases Budget	February
Budgeted cost of goods sold
Desired ending inventory
Total inventory needed
Beginning inventory
Required purchases
Schedule of cash payments
Payment on current month purchases
Payment on prior month purchases
Total budgeted cash payments