Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase.
In Acti's budgeted balance sheet at December 31, at what amount will accounts payable for raw materials be shown?

Question

Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:  At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase.
In Acti's budgeted balance sheet at December 31, at what amount will accounts payable for raw materials be shown?

Quizplus · Accepted Answer

Accounts payable = $780,000 × 60% = $468,000

Acti Manufacturing Corporation Is Estimating the Following Raw Material Purchases