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, $1,400,000; July, $1,400,000; and August, $1,300,000. Hint: Use the relation (Beginning Accounts Payable + Purchases on Credit - Payments on Accounts Payable= Ending Accounts Payable) to solve for budgeted purchases. Accounts payable June 30 May 31 July 31 $ 180,000 $ 130,000 $100,000 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 $130, 000 August
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, $1,400,000; July, $1,400,000; and August, $1,300,000. Hint: Use the relation (Beginning Accounts Payable + Purchases on Credit - Payments on Accounts Payable= Ending Accounts Payable) to solve for budgeted purchases. Accounts payable June 30 May 31 July 31 $ 180,000 $ 130,000 $100,000 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 $130, 000 August
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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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, $1,400,000; July,
$1,400,000; and August, $1,300,000. Hint: Use the relation (Beginning
Accounts Payable + Purchases on Credit - Payments on Accounts Payable=
Ending Accounts Payable) to solve for budgeted purchases.
Accounts payable
June 30
May 31
$ 180,000 $ 130,000 $100,000
July 31
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
$130, 000
August
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