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Assume a merchandising company's estimated sales for January, February, and March are $117,000, $137,000, and $127,000, respectively. Its cost of goods sold is always 60% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the subsequent month. What is the accounts payable balance at the end of February?

Assume a merchandising company's estimated sales for January, February, and March are $117,000, $137,000, and $127,000, respectively. Its cost of goods sold is always 60% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the subsequent month. What is the accounts payable balance at the end of February?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume a merchandising company's estimated sales for January, February, and March are $117,000, $137,000, and $127,000, respectively. Its cost of goods sold is always 60% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the subsequent month. What is the accounts payable balance at the end of February?
Transcribed Image Text:Assume a merchandising company's estimated sales for January, February, and March are $117,000, $137,000, and $127,000, respectively. Its cost of goods sold is always 60% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the subsequent month. What is the accounts payable balance at the end of February?
Multiple Choice O O O O $50,820 $24,300 $51,990 $56,700
Transcribed Image Text:Multiple Choice O O O O $50,820 $24,300 $51,990 $56,700
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