H Question 2: Merchandise Purchases Budget (10 marks) Shoes R Us has assembled the following information to prepare a Merchandise Purchases Budget for the month of September 2021. Expected Sales: September $ 700,000 October $ 800,000 Cost of goods sold 65% (% of sales) Desired ending merchandise inventory 25% (% of following month's cost of goods sold) Note: The beginning inventory on September 1st, 2021 will be the desired amount Required (round all answers to the nearest dollar - no decimals): 5 6. Prepare a merchandise purchases budget in dollars for September 2021. (6 marks) 7 Shoes RUS Merchandise Purchases Budget 18 For the month ended September 2021 19 Amount 20 Budgeted cost of goods sold 21 Desired ending merchandise inventory 22 Total merchandise needs 23 Beginning merchandise inventory 24 Required merchandise purchases b. Assume Shoes R Us sales are much higher than budgeted. What is the impact on revenues and income? What is the impact on inventory? (2 marks) 9 30 31 c. What budget should be prepared before the Merchandise Purchases budget? Why? (2 marks) 32