Sound Off Audio Systems sells and installs car stereo systems. Managers need to prepare an inventory purchases budget for the first quarter of 2020. The company's sales budget for the first quarter is provided below: Jantes Budgeted Sales $100,000 February $98,000 March $90,000 Based on past experience the company expects the cost of goods sold to equal 80% of sales. Furthermore, the ending inventory balance each month should be $4,000 plus 20% of the current period's cost of goods sold. The inventory balance on December 31, 2019 was $17,000. The company makes all purchases on account and pays 60% of accounts payable in the month of purchase and the remaining 40% in the next month. Accounts payable stood at $18,000 at December 31, 2019. Required: 1) Prepare an inventory purchases budget for January, February, and March of 2020. January February March Budgeted CGS Add: Desired Ending Inventory Inventory needed Less: Beginning Inventory Required Purchases 2) Determine the amount of ending inventory and the accounts payable balance that will appear on the March 31, 2020 pro forma balance sheet. 3) Prepare a schedule of cash payments for inventory for January February, and March, 2020 January February March 60% of Current Purchases 40% of Prior Month Purchase Total Budgeted Payments 161