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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February March
April
Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
$460,000 $550,000 400,000
Total Sales
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 75% are collected
in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month is 80%
of the next month's projected total sales. All purchases of inventory are on account; 50% are paid in the month of
purchase, and the remainder is paid in the month following the purchase.
Brenton's budgeted total cash payments in March for inventory purchases are
$385,000.
$505,000.
$306,250.
$280,000.](https://content.bartleby.com/qna-images/question/0e39fa34-2961-4f96-aafa-ce6f44d277c9/c45462f2-88bb-4c7e-82af-22a693656f09/b3wn23c_thumbnail.jpeg)
Transcribed Image Text:Information pertaining to Brenton Corporation's sales revenue is presented in the following table:
February March
April
Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
$460,000 $550,000 400,000
Total Sales
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 75% are collected
in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month is 80%
of the next month's projected total sales. All purchases of inventory are on account; 50% are paid in the month of
purchase, and the remainder is paid in the month following the purchase.
Brenton's budgeted total cash payments in March for inventory purchases are
$385,000.
$505,000.
$306,250.
$280,000.
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