Type your question here Goldcoast Corporation has budgeted a total of $356,800 i
ID: 2379724 • Letter: T
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Goldcoast Corporation has budgeted a total of $356,800 in costs and expenses for the upcoming quarter. Of this amount, $40,000 represents depreciation expense and $6,800 represents the expiration of prepayments. Goldcoast's current payables balance is $260,000 at the beginning of the quarter. Budgeted payments on current payables for the quarter amount to $365,000. The company's estimated current payables balance at the end of the quarter is:Answer
A) $180,000. B) $205,000. C) $204,000. D) $315,000.Explanation / Answer
Total cash payments required for the quarter = total costs - depreciation - expiration of prepayments (as both depreciation and prepayments represent non-cash expenses)
So this is equal to 356,800-40,000-6,800 = 310,000
Current payables (ending balance) = current payables (beginning balance) + required cash payments - budgeted payments = 260,000 + 310,000 - 365,000 = 205,000. So the answer is choice B
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