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The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.:

-Wateredge Corporation has budgeted a total of $361,800 in costs and expenses for the upcoming quarter.Of this amount,$45,000 represents depreciation expense and $7,300 represents the expiration of prepayments.Wateredge's current payables balance is $265,000 at the beginning of the quarter.Budgeted payments on current payables for the quarter amount to $370,000.The company's estimated current payables balance at the end of the quarter is:
A)$179,500.
B)$204,500.
C)$203,500.
D)$310,000.

Question

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The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.:
 
-Wateredge Corporation has budgeted a total of $361,800 in costs and expenses for the upcoming quarter.Of this amount,$45,000 represents depreciation expense and $7,300 represents the expiration of prepayments.Wateredge's current payables balance is $265,000 at the beginning of the quarter.Budgeted payments on current payables for the quarter amount to $370,000.The company's estimated current payables balance at the end of the quarter is:
A)$179,500. 
B)$204,500. 
C)$203,500. 
D)$310,000.

Quizplus · Accepted Answer

The estimated current payables balance at the end of the quarter is calculated by taking the beginning payables balance, adding the total costs and expenses (excluding non-cash expenses like depreciation and prepayments), and then subtracting the budgeted payments on current payables. Here, the calculation is $265,000 (beginning balance) + $361,800 (total costs and expenses) - $45,000 (depreciation) - $7,300 (prepayments) - $370,000 (payments) = $204,500.

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