Question

kent company has a sales budget for next month of $800,000. cost of goods sold is expected to be 25 percent of sales. all goods are paid for in the month following purchase. the beginning inventory of merchandise is $40,000, and the ending inventory of $51,200 is desired. beginning accounts payable is $128,000. for kent company, the ending accounts payable should be:

Answer 1

The final accounts payable for Kent Company will amount to $211,200

Accounts payable are commitments with a short term. These are typically sums owed to suppliers or vendors for outstanding sums for products or services purchased. On the balance sheet, accounts payable are listed as a line item under current liabilities.

Cost of Goods Sold = Sales * 25%

COGS= 800,000 * 25%

Therefore, the Cost of Goods Sold = $200,000

Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory of Merchandise

Purchases = (200,000 + 51,200) - 40,000 = 251,200 - 40,000

Therefore, Purchases = $211,200

Ending Accounts Payable = Beginning Inventory + Purchases - Payments

Ending Accounts Payable = 128,000 + 211,200 - 128,000

Therefore, Ending Accounts Payable = $211,200

The initial accounts payable are paid in the month and used in the month prior.

To know more about Accounts Payable, refer to this link:

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