Question

Kid's Delight expects to sell $135,900 of toys in December, $64,700 in January, $74,400 in February, and $56,800 in March. The wholesale cost is 58 percent of the retail price. The receivables period is 30 days, the payables period is 60 days, and all inventory is purchased one month prior to selling it. What is the accounts payable balance at the end of February?

Answer 1

Answer:

$80,678

Explanation:

The computation of the account payable balance at the end of February month is shown below:

= (Expected sales held on January month + Expected sales held on February month) × given percentage

= ($64,700 + $74,400) × 58%

= $139,100 × 58%

= $80,678

Since the payable period is given i.e 60 days so we considered the two months i.e January and February