Question

Walton Books expects to purchase the following supplies: Required purchases (on account) April $114,000 May $134,000 June $146,000 Walton Books's accountant prepared the following schedule of cash payments for supplies purchases. Walton Books's suppliers require that 85 percent of purchases on account be paid in the month of purchase; the remaining 15 percent are paid in the month following the month of purchase. Required a. Complete the schedule of cash payments for supplies purchases by filling in the missing amounts. b. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter.

Answer 1

Solution a:

Schedule of cash payment for supplies Purchases
Particulars	April	May	June
Payment of current accounts payable	$96,900.00	$113,900.00	$124,100.00
Payment of previous accounts payable	$10,000.00	$17,100.00	$20,100.00
Total budgeted payments for supplies	$106,900.00	$131,000.00	$144,200.00

Solution b:

Accounts payable at the end of second quarter = $146,000*15% = $21,900