Question

EA13.

LO 7.3What is the amount of budgeted cash payments if purchases are budgeted for $420,000 and the beginning and ending balances of accounts payable are $95,000 and $92,000, respectively?

Answer 1

$423,000

Step-by-step explanation:

Initial accounts payable added to any purchases made during the period must equal ending accounts payable plus cash payments. Therefore, the amount of budgeted cash payments is:

`\$95,000 + \$420,000 = \$92,000 + budgeted\ cash\ payments\\budgeted\ cash\ payments = \$423,000`

The amount of budgeted cash payments is $423,000.