Correy Company reported the following information for 2016: $\begin{array}{lr}
&\text { October }&\text { November }&\text { December }\
\text { Budgeted sales } & \$ 460,000 & \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$ •Cost of goods sold is 35% of sales.
•Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
•Accounts payable is used only for inventory acquisitions.
How much is the budgeted balance for Accounts Payable at October 31, 2016?
A)$96,000
B)$144,000
C)$204,000
D)$102,400

Question

Correy Company reported the following information for 2016: $\begin{array}{lr}
&\text { October }&\text { November }&\text { December }\
\text { Budgeted sales } & \$ 460,000 & \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$ •Cost of goods sold is 35% of sales. 
•Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
•Accounts payable is used only for inventory acquisitions.
How much is the budgeted balance for Accounts Payable at October 31, 2016?
A)$96,000
B)$144,000
C)$204,000
D)$102,400

Quizplus · Accepted Answer

The budgeted balance for Accounts Payable at October 31, 2016, is 40% of October's budgeted purchases, which is 40% of $240,000, equaling $96,000.

Correy Company Reported the Following Information for 2016 •Cost of Goods Sold Is 35% of Sales