Question

Estate Corp., has the following information: Month Budgeted Purchases January $27,600 February 29,400 March 28,500 April...

Estate Corp., has the following information:

Month Budgeted Purchases
January $27,600
February 29,400
March 28,500
April 30,480
May 27,680


Purchases are paid for in the following manner:
15% of the purchase amount in the month of purchase
35% of the purchase amount in the month after purchase
50% of the purchase amount in the second month after purchase

What is the expected Accounts Payable balance as of May 31?

A. $38,768

B. $4,572

C. $34,196

D. $33,503

Homework Answers

Answer #1

Accounts Payable balance as of May 31 = 50% * Purchaseof April + 85% * Purchase of May

= 50% * 30,480 + 85% * $ 27,680

= $ 38,768

Hence the correct answer is A. $38,768

Note :

January February March April May
Purchases 27,600 29,400 28,500 30,480 27,680
Receipts of Credit Sales:
15% in Month of Purchase 4,140 4,410 4,275 4,572 4,152
35% in Month after the month of Purchase 9,660 10,290 9,975 10,668
50% in second Month after the month of Purchase 13,800 14,700 14,250
Total Receipts 4,140 14,070 28,365 29,247 29,070
Accounts Payble Balance Paid Paid Paid 50% Remaining 85% Remaining
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