Tremont, Inc. sells tire rims. Its sales budget for the nine months ended September 30, 2014, follows:

In the past, cost of goods sold has been 40% of total sales. The director of mar-keting and the financial vice president agree that each quarter’s ending inventory should not be below $ 20,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $ 220,000 during the fourth quarter. The January 1 inventory was $ 32,000. 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- monthperiod.

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Quarter Ended Nine-Month Total June 30 34,000 136,000 $120,000 170,000 March 31 Cash sales, 20% Credit sales, 80% Total sales September 30 29,000 116,000 145,000 24,000 96,000 87,000 348,000 $ 435,000