Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $125,000 and accounts payable of $160,000, and Inventory of $78,000. Actual sales for May and June, and budgeted sales for July, August, September, and October are

Month	Actual Sales	Month	Budgeted Sales
May	$250,000	July	$ 260,000
June	225,000	August	240,000
		September	270,000
		October	275,000

All sales are on credit with 60% collected during the month of sale, 30% collected during the next month, and 10% collected during the second month following the month of sale. Cost of goods sold averages 60% of sales revenue. Ending inventory is one-half of the next months 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 $95,000 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.

MTC Wholesalers
Purchases Budget
For the Months of July, August, and September
		July	August	September
Inventory required, current sales
Desired ending inventory
Total inventory needs
Less beginning inventory
Purchases

Do not use a negative sign with your answers.

MTC Wholesalers
Cash Budget
For the Months of July, August, and September
		July	August	September
Cash balance, beginning
Cash receipts
Current month's sales
Previous month's sales
Sales two months prior
Total receipts
Cash available
Cash disbursements:
Purchases
Operating costs
Total disbursements
Cash balance, ending