Rainbow Company is a merchandising Company. Estimated sales for July, August, and September will be $200,000, $190,000, and $210,000, respectively. Each months ending inventory must equal 20% of the cost of next months sales. The average gross profit ration is 60%. The company pays for 40% of its merchandise purchase in the month of purchase and the remaining 60% in the month following the purchase.

1. How much is the budgeted merchandise purchase in August?

2. How much is the budgeted cash payments in August for merchandise purchases.

3. What is the account payable balance at the end of August?