Franklin Tools, which sells power tools, had $350,000 of cost of goods sold during the month of December. The company projects a 6 percent increase in cost of goods sold during January. The inventory balance as of December 31 is $28,000, and the desired ending inventory balance for January is $30,000. Franklin pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of December 31 was $38,000.

Requirements:

1. Determine the amount of purchases budgeted for January.
2. Determine the amount of cash payments budgeted for inventory purchases in January.