Question
The July 31st 1997 balance sheet of sun Corp follows Cash 8000 Accounts receivable (net of allowances for uncollectible accounts of $2,000) 38000 Inventory 16000
The July 31st 1997 balance sheet of sun Corp follows
Cash 8000
Accounts receivable (net of allowances for uncollectible accounts of $2,000) 38000
Inventory 16000
Property plant and equipment
( net of allowances for accumulated depreciation of $60000) 40000
$102,000
Accounts payable $ 82500
Common stuck 50000
Retained earnings (deficit) (30,500)
$102,000
Sales are budgeted as follows August $110,000
September $120,000
Collections are expected to be 60% in the month of sale 38% the next month and 2% uncollectible
The gross margin is 25% of sales. Purchases each month are 75% of the next month projected sales. The purchases are paid in full the following month
Other expenses for each month paid in cash or expected to be $16,500. Depreciation each month is $5,000.
What is the projected balance in accounts payable on August 31st 1997?
A. 106500
B. 90000
C. 82500
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started