Ahmed Company purchases all merchandise on credit. It recently budgeted the month-en accounts payable balances below. Cash payments on accounts payable during each mont are expected to be June, $1,350,000; July, $1,400,000; and August, $1,400,000. Hint: Use- the relation (Beg. Accounts Payable + Purchases on Credit - Payments on Accounts Payab = End. Accounts Payable) to solve for budgeted purchases. Accounts payable June 30 May 31 $ 150,000 $ 130,000 Computing budgeted merchandise purchases from accounts payable June July Budgeted amounts: July 31 $ 200,000 Ending accounts payable Add: Cash paid on accounts payable Total accounts payable Less: Beginning accounts payable Budgeted merchandise purchases August 31 $ 160,000 August
Ahmed Company purchases all merchandise on credit. It recently budgeted the month-en accounts payable balances below. Cash payments on accounts payable during each mont are expected to be June, $1,350,000; July, $1,400,000; and August, $1,400,000. Hint: Use- the relation (Beg. Accounts Payable + Purchases on Credit - Payments on Accounts Payab = End. Accounts Payable) to solve for budgeted purchases. Accounts payable June 30 May 31 $ 150,000 $ 130,000 Computing budgeted merchandise purchases from accounts payable June July Budgeted amounts: July 31 $ 200,000 Ending accounts payable Add: Cash paid on accounts payable Total accounts payable Less: Beginning accounts payable Budgeted merchandise purchases August 31 $ 160,000 August
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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, $1,350,000; July, $1,400,000; and August, $1,400,000. Hint: Use
the relation (Beg. Accounts Payable + Purchases on Credit - Payments on Accounts Payable
= End. Accounts Payable) to solve for budgeted purchases.
Accounts payable
June 30
May 31
July 31
$ 150,000 $ 130,000 $ 200,000
Computing budgeted merchandise purchases from accounts payable
Budgeted amounts:
June
July
Ending accounts payable
Add: Cash paid on accounts payable
Total accounts payable
Less: Beginning accounts payable
Budgeted merchandise purchases
August 31
$ 160,000
August
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