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Walker Company prepares monthly budgets. Company policy is to end each month with merchandise inventory equal to 15% of budgeted unit sales for the following
Walker Company prepares monthly budgets. Company policy is to end each month with merchandise inventory equal to 15% of budgeted unit sales for the following month. Budgeted sales and merchandise purchases for the next three months follow. Beginning inventory on July 1 is 30,000 units. The company budgets sales of 210,000 units in October. The merchandise cost per unit is $3. Prepare the merchandise purchases budgets for the months of July, August, and September: \begin{tabular}{|l|r|r|r|} \hline \multicolumn{3}{|c|}{ WALKER COMPANY } \\ \hline \multicolumn{3}{|c|}{ Merchandise Purchases Budget } \\ \hline Budgeted sales units & July & August & September \\ \hline Add: Desired ending inventory & 200,000 & 330,000 & 310,000 \\ \hline Next period budgeted sales units & & & \\ \hline Ratio of inventory to future sales & & & \\ \hline Desired ending inventory units & & & \\ \hline Total required units & & \\ \hline Less: Beginning inventory units & & \\ \hline Units to purchase & & \\ \hline Cost per unit & & \\ \hline Cost of merchandise purchases & & \\ \hline \end{tabular}
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