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, $1,400,000; June, $1,500,000; July, $1,350,000; and August, $1,300,000 Accounts Merchandise Payable Inventory May 31 $130,000 $220,000 June 30 170,000 500,000 July 31 400,000 200,000 August 31 140,000 360,000 August (1) Compute the budgeted amounts of merchandise purchases. Budgeted amounts: June July Ending accounts payable Payments on account Subtotal Beginning accounts payable Purchases 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 (500,000) (200,000) Cost of goods sold (360,000)