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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

Managerial Accounting: The Cornerstone of Business Decision-Making
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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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
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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