Sasha Company has a sales budget for next month of $150,000.Cost of goods sold is expected to be 40 percent of sales.All goods are purchased in the month used and paid for in the month following purchase.The beginning inventory of merchandise is $5,000,and an ending inventory of $6,000 is desired.Beginning accounts payable is $38,000. What should the ending accounts payable be for Sasha Company?

Question

Quizplus · Accepted Answer

To find the ending accounts payable, we need to calculate the total amount of purchases made during the month.

Sales budget = $150,000

Cost of goods sold = 40% of sales budget = 0.4 * $150,000 = $60,000

Purchases = Cost of goods sold + Ending inventory - Beginning inventory

Ending inventory = $6,000 
Beginning inventory = $5,000

Purchases = $60,000 + $6,000 - $5,000 = $61,000

To find the ending accounts payable, we need to add the purchases to the beginning accounts payable and subtract any payments made during the month:

Ending accounts payable = Beginning accounts payable + Purchases - Payments

Beginning accounts payable = $38,000 
Purchases = $61,000

Assuming no payments were made during the month,

Ending accounts payable = $38,000 + $61,000 - $0 = $99,000

Therefore, the best choice is B.

Sasha Company Has a Sales Budget for Next Month of $150,000.Cost