Edit View History rks Tools Window Help Help Save& Exit Submit 3 (Chapters 10, 1

Question

Edit View History rks Tools Window Help Help Save& Exit Submit 3 (Chapters 10, 11,& 14) 6 Payne Company provided the following information relevant to its inventory sales and purchases for December Year 1 and t quarter of Year 2 he first Dec. Year 1 Jan. Year 2 Peb. Year 2 Mar. Year (Actual) (Budgeted) (Budgeted) (Budgeted) $80,000 $180,000 $120,000 os2sCost of goods sold Desred ending inventory levels are 25% of the following month's projected cost of goods sold. The company purchases all inventory on account. January Year 2 budgeted purchases are $150,000. The normal schedule for inventory payments is 60% payment in month of purchase and 40% payment in month following purchase. Budgeted cash payments for inventory in February Year 2 would be: Muiple Choice $132,600 $29,000. K Prev 4 of 30 B MacBook Pro 5 8 0

Explanation / Answer

February purchase = 180000+(120000*25%)-(180000*25%) = 165000

Cash payment in feb = (150000*40%+165000*60%) = 159000

so feb cash payment for purchase is 159000

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