Acti Manufacturing Corporation is estimating the following raw material purchase
ID: 2580491 • Letter: A
Question
Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:
At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase.
In Acti's budgeted balance sheet at December 31, at what amount will accounts payable for raw materials be shown?
Multiple Choice
$588,000
$780,000
$564,000
$468,000
September $ 830,000 October $ 940,000 November $ 860,000 December $ 780,000Explanation / Answer
AP as on December 31=(60%*December purchases)
=(0.6*780,000)
which is equal to
=$468000(D)