Sullivan sells tire rims. Its sales budget for the nine months ended September 30 follows:

In the past, cost of goods sold has been 65% of total sales. The director of marketing and the financial vice president agree that each quarter€™s ending inventory should not be below $10,000 plus 15% of cost of goods sold for the following quarter. The marketing director expects sales of $200,000 during the fourth quarter. The January 1 inventory was $17,000.
Requirement
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 (use Exhibit 9-22 as a model).

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Quarter Ended Nine-Month Mar 31 Jun 30 Sep 30 Total Cash sales, 40% Credit sales, 60% Total sales, 100% S 40,000 60,00050,000 $150,000 225,000 $150,000 $125,000 S375,000 60,000 90,000 75,000 $100,000