The purchasing officer for The Majestic Emporium has prepared a purchases budget for the financial year ending 31 March 2020, based on the following data.

The cost of sales is 65% of sales, and the store’s policy is to maintain a month-end inventory balance sufficient to meet the projected sales requirement for the following month. The store pays for 60% of its purchases in the month of purchase, 30% in the following month, and 10% in the second month following.
Required

(a) Calculate the amount of purchases required for April and May of 2020.

(b) Calculate the estimated cash payments in April and May for inventory purchased.

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Purchases for February 2020 Purchases for March 2020 Ending inventory - 31 March 2020 Budgeted sales: April 2020 May 2020 June 2020 July 2020 $380.000 449000 438900 676000 618000 714000 660000