Exercise 07-28A Merchandising: Computing budgeted purchases and cost of goods sold LO P4 Ahmed Company purchases all merchandise on credit. It recently budgeted the month-end accounts payable balances and merchandise inventory balances below. Cash payments on accounts payable during each month are expected to be May, $1,400,000; June, $1,400,000; July, $1,300,000; and August, $1,400,000 Accounts Merchandise Payable Inventory May 31 $160,000 $280,000 June 30 120,000 200,000 July 31 300,000 500,000 August 31 190,000 390,000 (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 Cost of goods sold (200,000) (500,000) (390,000)