Question

EB13.

LO 7.3What is the amount of budgeted cash payments if purchases are budgeted for $190,500 and the beginning and ending balances of accounts payable are $21,000 and $25,000, respectively?

Answer 1

$186,500

Step-by-step explanation:

In order to correctly balance accounts payable, the initial accounts payable balance plus budgeted purchases must equal the ending balance of accounts payable plus budgeted cash payments. Therefore, the amount of budgeted cash payments is:

`\$21,000 + \$190,500 = \$25,000 + budgeted\ cash\ payments\\budgeted\ cash\ payments = \$423,000`

The amount of budgeted cash payments is $186,500.