PLEASE INCLUDE STEPS AND EXPLANATION - THANK YOU

Sam Company, which sells luxury goods, had $350,000 of cost of goods sold during the month of January. The company projects a 7 percent increase in cost of goods sold during February. The inventory balance as of January 31 is $85,000, and the desired ending inventory balance for February is $62,000. Sam must pay cash to settle at least 40 percent of its purchases on account during the month of purchase and pays the remaining 60 percent in the month following the purchase. The accounts payable balance as of January 30 was $190,000.

Required

1. Determine the amount of purchases budgeted for February.

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