Nobula Corp. is preparing their budget for the 2^nd quarter and provides the following data: Assume that accounts payable pertains only to suppliers of inventory. Based on the above data, the amount of Accounts Payable that should be shown in the budgeted balance sheet as on June 30th is:

Question

Quizplus · Accepted Answer

Accounts Payable as on June 30th can be calculated as follows:

Beginning Accounts Payable + Purchases - Payments = Ending Accounts Payable

Beginning Accounts Payable = $3,400 
Purchases = (75% of March sales + 25% of April sales) = (0.75*$22,000 + 0.25*$20,000) = $21,500 
Payments = (50% of March purchases + 50% of April purchases + 10% of May purchases) = (0.5*$18,000 + 0.5*$20,000 + 0.1*$25,000) = $12,800

Therefore, Ending Accounts Payable = $3,400 + $21,500 - $12,800 = $12,100

However, based on the information provided, Nobula Corp. only considers suppliers of inventory for accounts payable. From the given data, it is not possible to distinguish between inventory and non-inventory purchases. Therefore, we need to assume that all purchases made by Nobula Corp. during the quarter are for inventory.

Hence, the amount of Accounts Payable that should be shown in the budgeted balance sheet as on June 30th is $10,800 (which is 90% of the calculated Ending Accounts Payable). Therefore, the correct answer is option C.