Ahmed Company purchases all merchandise on credit. It recently budgeted the month-end accounts payable balances below. Cash payments on accounts payable during each month are expected to be June, $1,490,000; July, $1,425,000; and August, $1,495,000. Hint: Use the relation (Beginning Accounts Payable + Purchases on Credit - Payments on Accounts Payable = Ending Accounts Payable) to solve for budgeted purchases. May 31 June 30 July 31 $ 150,000 $ 200,000 $ 235,000 Accounts payable Computing budgeted merchandise purchases from accounts payable Budgeted amounts: July Ending accounts payable Add: Cash paid on accounts payable Total accounts payable Less: Beginning accounts payable Budgeted merchandise purchases $ June 0 August 31 $ 195,000 0 $ 0 0 $ August 0 0

Ahmed Company purchases all merchandise on credit. It recently budgeted the month-end accounts payable balances below. Cash payments on accounts payable during each month are expected to be June, $1,490,000; July, $1,425,000; and August, $1,495,000. Hint: Use the relation (Beginning Accounts Payable + Purchases on Credit - Payments on Accounts Payable = Ending Accounts Payable) to solve for budgeted purchases. May 31 June 30 July 31 $ 150,000 $ 200,000 $ 235,000 Accounts payable Computing budgeted merchandise purchases from accounts payable Budgeted amounts: July Ending accounts payable Add: Cash paid on accounts payable Total accounts payable Less: Beginning accounts payable Budgeted merchandise purchases $ June 0 August 31 $ 195,000 0 $ 0 0 $ August 0 0

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 45BEB: Pilsner Inc. purchases raw materials on account for use in production. The direct materials...

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