Vivian Books buys books and magazines directly from publishers and distributes t
ID: 2499967 • Letter: V
Question
Vivian Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory.
Vivian Books’s accountant prepared the following schedule of cash payments for inventory purchases. Vivian Books’s suppliers require that 95 percent of purchases on account be paid in the month of purchase; the remaining 5 percent are paid in the month following the month of purchase.
Complete the schedule of cash payments for inventory purchases by filling in the missing amounts.
Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter.
Vivian Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory.
Explanation / Answer
April May June Required purchases (on account) 113,000 133,000 145,000 Payment for current accounts payable $107,350 113000*95% 126,350 133000*95% 137,750 145000*95% Payment for previous accounts payable $14,000 5,650 113000*5% 6,650 133000*5% June Purchase -month payment $121,350 $132,000 $144,400 amount of accounts payable-end of 2nd quarter 7,250 145000*5%
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