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Metro, Incorporated sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 15% of the
Metro, Incorporated sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 15% of the following month's expected cost of goods sold. Expected cost of goods sold for April is $72,000. All purchases are made on account with 30% of accounts paid in the month of purchase and the remaining 70% paid in the month following the month of purchase.
Sales | January | February | March |
---|---|---|---|
Budgeted cost of goods sold | $ 41,000 | $ 52,000 | $ 61,000 |
Plus: Desired ending inventory | 7,800 | ||
Inventory needed | 48,800 | ||
Less: Beginning inventory | (6,150) | ||
Required purchases | $ 40,600 |
Based on this information the total cash paid in March to settle accounts payable is
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