Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $262,500 and accounts payable (related to inventory purchases) of $148,500. Actual sales for May and June, and budgeted sales for July, August, September, and October are:

MonthActual SalesMonthBudgeted SalesMay$225,000July$ 135,000June240,000August120,000 September150,000 October180,000

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 $42,000 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 WholesalersPurchases BudgetFor the Months of July, August, and September JulyAugustSeptemberInventory required, current sales Desired ending inventory Total inventory needs Less beginning inventory Purchases

Do not use a negative sign with your answers.

MTC WholesalersCash BudgetFor the Months of July, August, and September JulyAugustSeptemberCash 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