Exercise 22-28A Merchandising: Computing budgeted purchases and cost of goods sold LO P4 Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable during each month are expected to be: May, $1,300,000; June, $1,400,000; July, $1,400,000; and August, $1,300,000 May 31 June 30 July 31 August 31 Accounts Payable $130,000 130,000 400,000 100,000 Merchandise Inventory $ 270,000 400,000 200,000 380,000 August (1) Compute the budgeted amounts of merchandise purchases. Budgeted amounts: June July Ending accounts payable Payments on account Subtotal 0 0 0 Beginning accounts payable Purchases $ 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 (400,000) (200,000) Cost of goods sold (380,000)