Question

Funnel Manufacturing Company has provided the follwoing information: Month Budgeted Sales January $ 76,000 February 85,000...

Funnel Manufacturing Company has provided the follwoing information:

Month

Budgeted
Sales
January

$ 76,000
February

85,000
March

92,000
April

79,000

Budgeted Selling and Administrative Expenses Per Month are as follows:

Wages, $15,000

Advertising, $12,000

Depreciation, $3,000

Other, 4 percent of Sales

Cost of Goods Sold is 60% of Sales. All inventory is purchased in the month it is sold. Inventory purchases are paid 2/3 in the month of purchase, the remaining 1/3 paid in the following month.  

How much cash will be paid for purchases during the month of February?

a.

$96,600
b.

$49,200
c.

$51,000
d.

$45,600
Business   Accounting   
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Homework Answers

Answer #1

Answer:

cash will be paid for purchases during the month of February =$49200

Working notes for the above answer is as under

January

February

March

April

Sales

76000

85000

92000

79000

Cost of goods sold =60% of sale

45600

51000

55200

47400

Purchase for the month

45600

51000

55200

47400

2/3 in the month of purchase (A)

30400

34000

36800

31600

1/3 paid in the following month. (B)

15200

17000

18400

Paid for purchases during the month (A+b)

30400

49200

53800

50000


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