Christie Corpoation makes all purchases on account, subject to the following pay
ID: 2562714 • Letter: C
Question
Christie Corpoation makes all purchases on account, subject to the following payment pattern:
Paid in the month of purchase: 30%
Paid in the first month following purchase: 65%
Paid in the second month following purchase: 5%
If purchases for April, May, and June were $200,000, $160,000, and $250,000, respectively, what was the firm's budgeted accounts payables balance on June 30?
$189,000
$179,000
$183,000
$ 241,00
$175,000
A.$189,000
B.$179,000
C.$183,000
D.$ 241,00
E.$175,000
Explanation / Answer
SOLUTION
Firm's budgeted accounts payables balance on June 30 is - $183,000.
Purchases of April will be paid till the end of June, so there will no balance from April purchases.
From May purcahses, only 5% will be payable i.e. $160,000*5% = $8,000
From June purcahses, 70% will be payable i.e. $250,000*70% = $175,000
Total Payable = $8,000 + $175,000 = $183,000.
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