Exercise 20-28A 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. $1,100,000 June. $1,500,000, July, $1,250,000, and August, $1.400,000 Accounts Merchandise Payable Inventory $180,000 $250,000 June 30 300,000 July 31 400,000 200,000 August 31 120,000 400,000 May 31 150,000 August (1) Compute the budgeted amounts of merchandise purchases. Budgeted amounts: June July Ending accounts payable Payments on account Subtotal 0 0 Beginning accounts payable Purchases $ 0 $ 0 $ 0 0 August (2) Compute the budgeted amounts of cost of goods sold. Budgeted amounts: June July Beginning inventory Purchases Cost of goods available for sale Ending Inventory (300,000) (200,000) Cost of goods sold (400,000) Saved Exercise 20-30A Merchandising: Budgeted cash payments LO P4 Hector Company reports the following: Sales Purchases July $22,000 14,080 August $30,000 19,200 September $34,000 22,000 Payments for purchases are made in the month after purchase. Selling expenses are 16% of sales, administrative expenses are 12% of sales, and both are paid in the month of sale Rent expense of $1.800 is paid monthly. Depreciation expense is $1.600 per month Prepare a schedule of budgeted cash payments for August and September HECTOR COMPANY Budgeted Cash Payments For August and September August September Payments for Exercise 20-31A Merchandising: Cash budget LO P4 Castor, Inc., is preparing its master budget for the quarter ended June 30 Budgeted sales and cash payments for merchandise for the next three months follow Budgeted Sales Cash payments for merchandise April $39,900 22,400 May $41,100 15,700 June $25.100 16,100 Sales are 70% cash and 30% on credit. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13.100 in cash. $13,100 in accounts receivable $12,100 in accounts payable, and a $3,100 balance in loans payable A minimum cash balance of $13,100 is required Loans are obtained at the end of any month when a cash shortage occurs. Interest is 2% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repald at the end of the month Operating expenses are paid in the month incurred and include sales commissions (5% of sales), shipping (4% of sales) office salaries (56100 per month), and rent ($4.100 per month). Prepare a cash budget for each of the months of April, May, and June (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) CASTOR, INC Cash Budget For April, May, and June April $ 13,100 May June Beginning cash balance Total cash available Cash payments for Total cash payments Preliminary cash balance Ending cash balance Loan balance April S 3.100 May June Loan balance - Beginning of month Addtional loan (loan repayment) Loan balance - End of month