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

Cave Hardware's forecasted sales for April, May, June, and July are $190,000, $210,000, $180,000, and $230,000, respectively. Sales are 70% cash and 30% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 80% of sales and ending inventory is maintained at $35,000 plus 20% 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 are the budgeted cash payments in June to account for the inventory purchases at Cave Hardware?

A) $377,600
B) $315,200
C) $160,736
D) $154,464

Correct Answer:

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