X Company has the following information from its purchases budget, payroll budge

Question

X Company has the following information from its purchases budget, payroll budget and capital expenditures budget.

The company pays for all of its purchases of inventory in the month following the purchase. It pays 50% of its payroll in the month the wages are earned and 50% in the next month and it pays for all captial expensditures in the month of the purchase.

Compute the total budgeted accounts payable and wages payable on February 28.

Budgeted Inventory Capital     Month    Purchases    Payroll    Expenditures Depreciation January $ 80,000 $40,000 $10,000 $15,000 February 100,000 $50,000 $12,000 $15,000 March 70,000 $60,000 $14,000 $15,000

Explanation / Answer

As on feb 28 Accounts payable 100,000 Wages payable Feb 50,000*50%= 25,000

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