Walker Company prepares monthly budgets The current budget p

Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of 20,000 units. Company policy is to end each month with merchandise inventory equal to 10% of budgeted sales for the following month Budgeted sales and merchandise purchases for the next three months follow. The company budgets sales of 200,000 units in October Sales (Units) Purchases (Units) July August September 180,000 300,000 300,000 192,000 300,000 290,000 Prepare the merchandise purchases budgets for the months of July, August, and September WALKER COMPANY Merchandise Purchases Budget For July, August, and September July August September 20,000 300,000 320,000 Budgeted ending inventory units 180,000 300,000 udgeted units sales for month Required units of available invento Beginning inventory (units) Units to be purchased 192,000 300,000 290,000

Solution

Merchandise purchase budget :

	July	August	September
Budgeted units sales	180000	300000	300000
Add: Desired ending inventory	30000	30000	20000
Total	210000	330000	320000
Less: Beginning inventory	-18000	-30000	-30000
Purchase units	192000	300000	290000