Mumbai Inc. has prepared the following purchases budget: Month Budgeted Purchase
ID: 2415462 • Letter: M
Question
Mumbai Inc. has prepared the following purchases budget:
Month
Budgeted Purchases
June
$67,000
July
72,500
August
76,300
September
73,700
October
69,200
All purchases are paid for as follows: 10% in the month of purchase, 50% in the following month, and 40% two months after purchase. Calculate balance of Accounts payable at the end of October.
A) $77,680
B) $91,760
C) $69,330
D) $74,290
Note: Supporting computations are required for this problem. Failure to do so will result in loss of points.
Month
Budgeted Purchases
June
$67,000
July
72,500
August
76,300
September
73,700
October
69,200
Explanation / Answer
Ans is 'B' $91,760
Breakup:
Outstanding for October 90% of 69200 = 62,280
Outstanding for September 40% of 73700 = 29,480
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