Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:

		January		February		March
Material purchases		$ 12,340		14,450		11,270

Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The expected January 31 Accounts Payable balance is:

Multiple Choice

• $6,500.

• $7,225.

• $12,340.

• $6,170.

• $9,420.

Coombs Fashions forecasts sales of $130,000 for the quarter ended December 31. Its gross profit rate is 10% of sales, and its September 30 inventory is $35,000. If the December 31 inventory is targeted at $44,000, budgeted purchases for the fourth quarter should be:

Multiple Choice

• $139,000.

• $13,000.

• $108,000.

• $126,000.

• $108,500.