Kevin Montgomery Retail seeks your assistance to develop cash and other budget information for May, June, and July. At April 30, the company had cash of $6,500, accounts receivable of $441,000, inventories of $450,250, and accounts payable of $137,055. The budget is to be based on the following assumptions: SALES Each month's sales are billed on the last day of the month. Customers are allowed a 3% discount if payment is made within 10 days after the billing date. Receivables are recorded in the accounts at their gross amounts (not net of discounts). 55% of the billings are collected within the discount period: 30% are collected by the end of the month; 9% are collected by the end of the second month; and 6% turn out to be uncollectible PURCHASES The marketing, general, and administrative expenses and 60% of all purchases of merchandise are paid in the month purchased, with the remainder of merchandise purchases paid in the following month. The number of units in each month's ending inventory is equal to 125% of the next month's sales (units). The cost of each unit of inventory is $34. Marketing, general, and administrative expenses, of which $7,000 is depreciation, are equal to 15% of the current month's sales. Actual and projected sales are as shown below: Units Dollars March $476,000 April $488,000 May $ 480,000 $460,000 July $484,000 August $484,000 12,200 12,500 12,300 11,800 12,400 12,600 June What are the budgeted merchandise purchases (in dollars) for May? Multiple Choice $396,950. $417,200