Question

Galina, Inc. has prepared the following direct materials purchases budget: Month Budgeted DM Purchases June $68,000 July 79,500 August 78,400 September 76,300 October 72,400 All purchases are paid for as follows: 40% in the month of purchase, 50% in the following month, and 10% two months after purchase. Calculate the budgeted balance of accounts payable at the end of October. Group of answer choices $51,070 $7,630 $43,440 $14,870

Answer 1

Answer: $51070

Explanation:

The budgeted balance of accounts payable at the end of October will be calculated thus:

For October DM purchases = 60% × $72400 = $43440

For September DM purchases = 10% × $76,300 = $7630

Balance = $51070

Therefore, the budgeted balance of accounts payable at the end of October is $51070