Question

Concord Corporation reported the following information for 2016: October November December Budgeted sales $430000 $400000 $510000 Budgeted purchases $210000 $226000 $258000 Cost of goods sold is 35% of sales. Concord purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much is the budgeted balance for Accounts Payable at October 31, 2016? $84000 $126000 $216000 $90400

Answer 1

Answer:

a. $84,000

Explanation:

Given, credit purchases are 40% of the sales, will be collected in the following month

Credit purchase = Budgeted purchase * 40%

Credit purchase = $210,000 * 40%

Credit purchase = $84,000

So, the budgeted balance for Accounts Payable at October 31, 2016 is $84,000.