Information pertaining to Brenton Corporation\'s sales revenue is presented in t
ID: 2527153 • Letter: I
Question
Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 75% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month is 80% of the next month's projected total sales. All purchases of inventory are on account; 50% are paid in the month of purchase, and the remainder is paid in the month following the purchase.
Brenton's budgeted total cash payments in March for inventory purchases are
Explanation / Answer
February purchases paid in March - 550,000*80%*50% = 220,000
Answer was not listed
February purchases paid in March 550,000 *80%*50% $220,000 March purchases paid in March 400,000*80%*50% $160,000 Budgeted total cash payments in March $380000