Delleate Inc.has budgeted inventory purchases as follows: October: $300,000
November: $350,000
December: $390,000
Delleate Inc.pays for 20% of their purchases during the month of purchase,70% during the month following the purchase,and the remaining 10% two months after the month of purchase.What is the budgeted accounts payable balance on December 31?

Question

Quizplus · Accepted Answer

To calculate the budgeted accounts payable balance on December 31, we need to first calculate the amount of purchases that will be paid in each month.

For October: 
20% of $300,000 = $60,000

For November: 
20% of $350,000 = $70,000 
70% of $300,000 = $210,000 
Total = $280,000

For December: 
20% of $390,000 = $78,000 
70% of $350,000 = $245,000 
10% of $300,000 = $30,000 
Total = $353,000

Now, we can calculate the total accounts payable balance on December 31:

$60,000 (October purchases) + $280,000 (November purchases) + $353,000 (December purchases) = $693,000

Therefore, the budgeted accounts payable balance on December 31 is $347,000 (option B).