Cave Hardware's Forecasted Sales for April; May; June; and July

Cave Hardware's forecasted sales for April; May; June; and July are $200,000; $230,000; $190,000; and $240,000; respectively. Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold. All inventory purchases are paid 22% in the month of purchase and 78% in the following month. What is the balance of accounts payable on the June 30 budgeted balance sheet?

A) $32,175
B) $108,225
C) $146,250
D) $114,075

Correct Answer:

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