Metro, Inc. sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 20% of the following month's expected cost of goods sold. Expected cost of goods sold for April is $70,000. All purchases are made on account with 25% of accounts paid in the month of purchase and the remaining 75% paid in the month following the month of purchase. Sales Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed - Less: Beginning inventory Required purchases January February March $40,000 $50,000 $60,000 10,000 50,000 (8,000) $42,000 Based on this information the total cash paid in March to settle accounts payable is

Metro, Inc. sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 20% of the following month's expected cost of goods sold. Expected cost of goods sold for April is $70,000. All purchases are made on account with 25% of accounts paid in the month of purchase and the remaining 75% paid in the month following the month of purchase. Sales Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed - Less: Beginning inventory Required purchases January February March $40,000 $50,000 $60,000 10,000 50,000 (8,000) $42,000 Based on this information the total cash paid in March to settle accounts payable is

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 10PA: Sports Socks has a policy of always paying within the discount period and each of its suppliers...

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