The following information pertains to question 3 to 9. The February operating bu

ID: 2569082 • Letter: T

Question

The following information pertains to question 3 to 9. The February operating budget for Big Ben Boats shows the following figures:

Budgeted sales for February $100 000 and for March $200 000.

Collections for sales are 70% in the month of sale and 30% the month after the sale.

Gross margin is 30% of sales.

Administrative costs are $10 000 each month.

Beginning accounts receivable is $20 000.

Beginning inventory is $14 000.

Beginning accounts payable is $60 000. (All from inventory purchases.)

Purchases are paid in full the month following the purchase.

Desired ending inventory is 20% of next month's cost of goods sold (COGS).

5) For February, budgeted cash payments for purchases are:

Select one:

a. None of these answers is correct

b. $60 000

c. $14 000

d. $70 000

Budgeted cash payments for purchases for February = Beginning accounts payable balance = $60000 Option B is correct

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