The budget committee of Ridder Company collects the following data for its Westwood Store in preparing budgeted income statements for July and August 2020: 1. The store expects sales for July to be $426,000; for August, $475,000; and for September, $521,000. 2. It expects the cost of goods sold to be 60% of sales. 3. Company policy is to maintain ending merchandise inventory at 20% of the following month's cost of goods sold. 4. Operating expenses are estimated as follows: Sales salaries Advertising $47,000 per month 4% of monthly sales Rent expense $3,100 per month Depreciation 700 per month Delivery expense 2% of monthly sales Utilities 400 per month Sales commissions 3% of monthly sales Insurance 400 per month 5. Income taxes are estimated to be 30% of the income from operations. Prepare the merchandise purchases budget, using columns for each month. RIDDER COMPANY-Westwood Store Merchandise Purchases Budget For the Months of July and August, 2020 July Budgeted cost of goods sold Add Desired ending inventory Total value of merchandise required Less Beginning inventory Merchandise purchases required 255600 August 285000