The following information pertains to the October operating budget for Compass Corporation.

Budgeted sales for October $100,000 and November $200,000.

Collections for sales are 60% in the month of sale and 40% the next month.

Gross margin is 30% of sales.

Administrative costs are $10,000 each month.

Beginning accounts receivable (October 1) $20,000.

Beginning inventory (October 1) $14,000.

Beginning accounts payable (October 1) $60,000. (All from inventory purchases.)

Purchases are paid in full the following month.

Desired ending inventory is 20% of next month's cost of goods sold (COGS).

No loans are outstanding on October 1

For October, budgeted cash payments for purchases are:

Question 2 options:

	$20,000
	$80,000
	$60,000
	$40,000