Adi Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Adi,30% of raw materials purchases are normally paid for in the month of purchase.The remaining 70% is paid for in the month following the purchase. In Adi's budgeted balance sheet at December 31,at what amount will accounts payable for raw materials be shown?
A)$760,000
B)$532,000
C)$228,000
D)$588,000

Question

Adi Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:  At Adi,30% of raw materials purchases are normally paid for in the month of purchase.The remaining 70% is paid for in the month following the purchase. In Adi's budgeted balance sheet at December 31,at what amount will accounts payable for raw materials be shown?
A)$760,000 
B)$532,000 
C)$228,000 
D)$588,000

Quizplus · Accepted Answer

Accounts payable = $760,000 × 70% = $532,000

Adi Manufacturing Corporation Is Estimating the Following Raw Material Purchases