Question

MC Qu. 138 Fortune Company's direct materials... Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:JanuaryFebruaryMarch Material purchases$ 13,18015,29012,110 Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $7,900. The expected January 31 Accounts Payable balance is:

Answer 1

Answer:

The answer is "$6,590".

Explanation:

If 50% of the purchase amount would be paid in the next month, the account payable in January will thus amount to 50% of the item purchased in January. In January, all accounts payable at the start of Dec will therefore not be added to the trade payables for January.

$=\ 13,180 \times 50\%\\\\=\ 13,180 \times \frac{50}{100}\\\\=\frac{\ 659000}{100}\\\\=\ 6,590$