Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and

Question:

Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end balances and merchandise inventory balances. Cash payments on during each month are expected to be: May, $1,600,000; June, $1,490,000; July, $1,425,000; and August, $1,495,000. Use the available information to compute the budgeted amounts of
(1) Merchandise purchases for June, July, and August
(2) Cost of goods sold for June, July, and August.
____________________ ________ Merchandise Inventory
May 31 ...................... $150,000 ..................... $250,000
June 30 ...................... 200,000 ..................... 400,000
July 31 ...................... 235,000 ..................... 300,000
August 31 ................. 195,000 ..................... 330,000
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...