Peabody, Inc., sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June, and July. Budgeted cost of goods sold April May July June $61,000 $71,000 $81,000 $87,000 Peabody had a beginning inventory balance of $4,300 on April 1 and a beginning balance in accounts payable of $15,000. The company desires to maintain an ending inventory balance equal to 20 percent of the next period's cost of goods sold. Peabody makes all purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase. Required a. Prepare an inventory purchases budget for April, May, and June. Inventory Purchases Budget Budgeted cost of goods sold Plus: Desired ending inventory April May June $ 61,000 $ 71,000 $ 81,000 14,200 16,200 17,400 Inventory needed 75,200 87,200 98,400 Less: Beginning inventory 4,300 14,200 16,200 Required purchases (on account) $ 70,900 $ 73,000 $ 82,200