FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
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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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