Swenson Inc. sells tire rims. Its sales budget for the nine months ended September 30, 2016, follows:

In the past, cost of goods sold has been 40% of total sales. The director of marketing and the financial vice president agree that each quarter's ending inventory should not be below $8,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $225,000 during the fourth quarter. The January 1 inventory was $38,000. Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine-month period.

Quarter Ended Nine-Month June 30 March 31 September 30 Total Cash sales, 30% 37,500 $ 52,500 $ 45,000 $ 135,000 87,500 122,500 105,000 315,000 Credit sales, 70% $ 125,000 $ 175,000 $ 150,000 $ 450,000 Total sales