estate corp., has the following information: month budgeted purchases january $26,800 february 29,000 march 28,500 april 29,480 may 26,680 purchases are paid for in the following manner: 10% of the purchase amount in the month of purchase 50% of the purchase amount in the month after purchase 40% of the purchase amount in the second month after purchase what is the expected accounts payable balance as of may 31?
To calculate the expected accounts payable balance as of May 31, we need to determine the amounts that are paid in each month after the purchase.
For the January purchases, 10% is paid in the month of purchase, which is $26,800 * 10% = $2,680.
Then, 50% is paid in the month after purchase, which is $26,800 * 50% = $13,400.
Finally, 40% is paid in the second month after purchase, which is $26,800 * 40% = $10,720.
For the February purchases, 10% is paid in the month of purchase, which is $29,000 * 10% = $2,900.
Then, 50% is paid in the month after purchase, which is $29,000 * 50% = $14,500.
Finally, 40% is paid in the second month after purchase, which is $29,000 * 40% = $11,600.
For the March purchases, 10% is paid in the month of purchase, which is $28,500 * 10% = $2,850.
Then, 50% is paid in the month after purchase, which is $28,500 * 50% = $14,250.
Finally, 40% is paid in the second month after purchase, which is $28,500 * 40% = $11,400.
For the April purchases, 10% is paid in the month of purchase, which is $29,480 * 10% = $2,948.
Then, 50% is paid in the month after purchase, which is $29,480 * 50% = $14,740.
Finally, 40% is paid in the second month after purchase, which is $29,480 * 40% = $11,792.
For the May purchases, 10% is paid in the month of purchase, which is $26,680 * 10% = $2,668.
Then, 50% is paid in the month after purchase, which is $26,680 * 50% = $13,340.
Finally, 40% is paid in the second month after purchase, which is $26,680 * 40% = $10,672.
Now, let's calculate the total expected accounts payable balance as of May 31 by adding up the amounts:
$2,680 + $13,400 + $10,720 + $2,900 + $14,500 + $11,600 + $2,850 + $14,250 + $11,400 + $2,948 + $14,740 + $11,792 + $2,668 + $13,340 + $10,672 = $145,218.
The expected accounts payable balance as of May 31 is $145,218.
To calculate the expected accounts payable balance as of May 31, we need to determine the amounts of purchases that will be paid in each respective month.
Here's the breakdown of the purchases and their payment schedule:
- January purchases: $26,800
- Paid in January: 10% * $26,800 = $2,680
- Paid in February: 50% * $26,800 = $13,400
- February purchases: $29,000
- Paid in February: 10% * $29,000 = $2,900
- Paid in March: 50% * $29,000 = $14,500
- Paid in April: 40% * $29,000 = $11,600
- March purchases: $28,500
- Paid in March: 10% * $28,500 = $2,850
- Paid in April: 50% * $28,500 = $14,250
- Paid in May: 40% * $28,500 = $11,400
- April purchases: $29,480
- Paid in April: 10% * $29,480 = $2,948
- Paid in May: 50% * $29,480 = $14,740
- No payment in June (2 months after purchase)
- May purchases: $26,680
- Paid in May: 10% * $26,680 = $2,668
- No payment in June (1 month after purchase)
- No payment in July (2 months after purchase)
Now, let's calculate the expected accounts payable balance:
Accounts payable balance as of May 31 =
Remaining payments for January purchases + Remaining payments for February purchases + Remaining payments for March purchases + Remaining payments for April purchases + Remaining payments for May purchases
= ($13,400 - $2,680) + ($14,500 - $2,900 - $11,600) + ($14,250 - $2,850 - $11,400) + ($14,740 - $2,948) + $26,680
= $10,720 + ($1,950) + ($0) + ($11,792) + $26,680
= $10,720 + $1,950 + $0 + $11,792 + $26,680
= $51,142
Therefore, the expected accounts payable balance as of May 31 is $51,142.