Answer the following questions using the information below:
Wallaby Company has the following information:
$$\begin{array} { l c }
\text { Month } & \text { Budgeted Purchases } \
\text { January } & \$ 26800 \
\text { February } & 29000 \
\text { March } & 30520 \
\text { April } & 29480 \
\text { May } & 27680
\end{array}$$ Purchases are paid for in the following manner:
10% of the purchase amount in the month of purchase
50% of the purchase amount in the month after purchase
40% of the purchase amount in the month after purchase
-What is the expected balance in Accounts Payable as of 30 April?
A)$26 532
B)$38 740
C)$17 688
D)$12 208

Question

Answer the following questions using the information below:
Wallaby Company has the following information:
 $$\begin{array} { l c } 
\text { Month } & \text { Budgeted Purchases } \
\text { January } & \$ 26800 \
\text { February } & 29000 \
\text { March } & 30520 \
\text { April } & 29480 \
\text { May } & 27680
\end{array}$$ Purchases are paid for in the following manner:
10% of the purchase amount in the month of purchase
50% of the purchase amount in the month after purchase
40% of the purchase amount in the month after purchase
-What is the expected balance in Accounts Payable as of 30 April?
A)$26 532
B)$38 740
C)$17 688
D)$12 208

Quizplus · Accepted Answer

To calculate the expected balance in accounts payable as of 30 April, we need to add up the amounts that will be paid in each month.

For purchases made in April, 10% will be paid in April and 50% will be paid in May, leaving 40% to be paid in June. 
For purchases made in March, 10% was already paid in March, 50% will be paid in April, leaving 40% to be paid in May. 
For purchases made in February, 10% was already paid in February, 50% was paid in March, leaving 40% to be paid in April.

Therefore, the expected balance in Accounts Payable as of 30 April is:
(April Purchases: 10% + March Purchases: 50% + February Purchases: 40%) = (285,000 x 0.1) + (320,000 x 0.5) + (140,000 x 0.4) = $38,740.

So, the best choice is B.

Answer the Following Questions Using the Information Below: Wallaby Company

Answer the Following Questions Using the Information Below:
Wallaby Company