Fortune Company's Direct Materials Budget Shows the Following Cost of Materials

Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months: Material purchases
$$\begin{array} { l l c } \text { January } & \text { February } & \text { March } \\\$ 12,040 & \$ 14,150 & \$ 10.970\end{array}$$ Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The expected January 31 Accounts Payable balance is:

A) $7,075.
B) $6,020.
C) $12,040.
D) $9,270.
E) $6,500.

Correct Answer:

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