Blake Sodas, Inc has budgeted direct materials inventory purchases as follows
October: $300,000
November: $360,000
December: $460,000
Blake Sodas, Inc pays for 20% of their purchases during the month of purchase, 70% during the month following the purchase, and the remaining 10% two months after the month of purchase. What is the budgeted accounts payable balance on December 31?
A) $368,000
B) $404,000
C) $460,000
D) $440,000
B .B) Budgeted Accounts Payable balance on December 31
For Oct. purchases 0
For Nov. purchases
(10% x $360,000 ) $36,000
For Dec. purchases
(80% x $460,000 ) 368,000
Balance at the end $404,000
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