Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $262,500 and accounts payable (related to inventory purchases) of $148,500. Actual sales for May and June, and budgeted sales for July, August, September, and October are: Actual Month Sales Month Budgeted Sales May June $225,000 July 240,000 August September October $135,000 120,000 150,000 180,000 All sales are on credit with 75 percent collected during the month of sale, 20 percent collected during the next month, and 5 percent collected during the second month following the month of sale. Cost of goods sold averages 70 percent of sales revenue. Ending inventory is one-half of the next month's predicted cost of sales. The other half of the merchandise is acquired during the month of sale. All purchases are paid for in the month after purchase. Operating costs are estimated at $42,000 each month and are paid during the month incurred. Required Prepare purchases and cash budgets for July, August, and September. Do not use a negative sign with your answers. MTC Wholesalers Purchases Budget For the Months of July. August, and September July August Inventory required, current sales $ $ Desired ending inventory Total inventory needs Less beginning inventory Purchases $ Do not use a negative sign with your answers. MTC Wholesalers Cash Budget For the Months of July, August, and September September $ July August September Cash balance, beginning $ $ $ Cash receipts Current month's sales Previous month's sales Sales two months prior Total receipts Cash available Cash disbursements: Purchases Operating costs Total disbursements Cash balance, ending $ $ $