Purchases and Cash Budgets

On July $1,$ MTC Wholesalers had a cash balance of $$350,000$ and accounts payable of $$198,000$ related to inventory purchases. Actual sales for May and June, and budgeted

sales for July, August, September, and October are:

All sales are on credit with $75$ percent collected during the month of sale, $20$ percent collected during the next month, and $5$ percent collected during the second month

following the month of sale. Cost of goods sold averages $70$ percent of sales revenue. Ending inventory is one$-$half of the next month's predicted cost of sales. The other half

of the merchandise is acquired during the month of sale. All purchases are paid for in the month after purchase. Operating costs are estimated at $$56,000$ each month and

are paid during the month incurred.

Required

Prepare purchases and cash budgets for July, August, and September.

Do not use a negative sign with your answers.

Do not use a negative sign with your answers.