q.1

Fact Pattern: Information pertaining to Noskey Corporation's sales revenue is presented in the following table: Management estimates that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Quantity of inventory purchased is equal to next month's cost of sales, and gross profit margin is 30%. All purchases of inventory are on account, 25% are paid in the month of purchase, and the remainder are paid in the month following the purchase. Noskey Corporation's budgeted total cash payments in December Year 1 for inventory purchases are A. $220,500 B. $168,000 C. $283,500 D. $405,000