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Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $175,000 and accounts payable (related to inventory purchases) of $99,000. Actual

Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $175,000 and accounts payable (related to inventory purchases) of $99,000. Actual sales for May and June, and budgeted sales for July, August, September, and October are:

Month Actual Sales Month Budgeted Sales
May $150,000 July $ 90,000
June 160,000 August 80,000
September 100,000
October 120,000

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 $28,000 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 Answer Answer Answer
Desired ending inventory Answer Answer Answer
Total inventory needs Answer Answer Answer
Less beginning inventory Answer Answer Answer
Purchases Answer Answer Answer

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 Answer Answer Answer
Cash receipts
Current month's sales Answer Answer Answer
Previous month's sales Answer Answer Answer
Sales two months prior Answer Answer Answer
Total receipts Answer Answer Answer
Cash available Answer Answer Answer
Cash disbursements:
Purchases Answer Answer Answer
Operating costs Answer Answer Answer
Total disbursements Answer Answer Answer
Cash balance, ending Answer Answer Answer

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