Correy Company reported the following information for 2019: $\begin{array}{llll}&\text { October }& \text { November }& \text { December }\
\text { Budgeted sales } & \$ 460,000 & \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$ Cost of goods sold is 35% of sales.

-Correy 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, 2019?

Question

Correy Company reported the following information for 2019: $\begin{array}{llll}&\text { October }& \text { November }& \text { December }\
\text { Budgeted sales } & \$ 460,000 & \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$ Cost of goods sold is 35% of sales.

-Correy 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, 2019?

Quizplus · Accepted Answer

At the end of October, 40% of October's purchases are unpaid. October purchases are $240,000, so 40% of $240,000 is $96,000, which is the balance for Accounts Payable.

Correy Company Reported the Following Information for 2019 Cost of Goods Sold Is 35% of Sales