Sound Check, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 70% of sales. Its inventory policy calls for ending inventory in each month to equal 20% of the next month's budgeted cost of goods sold. All purchases are on credit, and 10% of the purchases in a month is paid for in the same month. Another 10% is paid for during the first month after purchase, and the remaining 80% is paid for in the second month after purchase. The following sales budgets are set: July, $200,000; August, $140,000; September, $170,000; October, $125,000; and November, $115,000.
1. Compute the budgeted merchandise purchases for July, August, September, and October. (Omit the "$" sign in your response.)
July August September October
Budgeted merchandise purchases $ $ $ $
2.Compute the budgeted payments on accounts payable for September and October. (Omit the "$" sign in your response.)
September October
Budgeted payments on accounts payable $ $
3.Compute the budgeted ending balances of accounts payable for September and October. (Omit the "$" sign in your response.)
September October
Budgeted ending balances of accounts payable $ $