Question

Martin Clothing Company is a retail company. The following information is available for several months of the current year:

Month	Purchases on Account	Cash Expenses Paid
May	$51,400	$20,300
June	62,700	22,030
July	48,000	19,900

All of Martin’s purchases are on account with 70 percent paid in the month of purchase and the rest paid the following month.

What is Martin’s projected accounts payable on May 31?

Answer 1

Solution

Accounts payable on May 31

$    15,420.00

Working

May Purchases	$    51,400.00
Less: Payment in May	$    35,980.00
Accounts payable on May 31	$    15,420.00