Walker Company prepares monthly budgets. The current budget plans for a September ending inventory of 28,500 units. Company policy is to end each month with merchandise inventory equal to a specified percent of budgeted sales for the following month. Budgeted sales and merchandise purchases for the three most recent months follow.

	Sales (Units)	Purchases (Units)
July	170,000	191,000
August	310,000	307,000
September	290,000	275,000

(1) Prepare the merchandise purchases budget for the months of July, August, and September.
WALKER COMPANY
Merchandise Purchases Budget
For July, August, and September
	July	August	September
Budgeted ending inventory units			28,500
Required units of available inventory
Units to be purchased	191,000	307,000	275,000
(2) Compute the ratio of ending inventory to the next month