Use the Following Information for Questions

question 47

Multiple Choice

Use the following information for questions
Livanos, Inc.reports all its sales on credit, and pays operating costs in the month incurred.Amounts for 2012 are:

-Customer amounts on account are collected 70% in the month of sale and 30% in the following month.
-Cost of goods sold is 60% of sales.
-Livanos purchases and pays for merchandise 40% in the month of acquisition and 60% in the following month.
-Operating expenses are: Salaries, $50,000; Depreciation, $12,000; Rent, $15,000; and Utilities, $14,000;
-Accounts payable is used only for inventory acquisitions.
-How much is Livanos' budgeted balance for Accounts Payable at May 30, 2012?

• A)$124,800
• B)$72,000
• C)$51,200
• D)$76,800

---

Definitions:

Design Defect

A flaw in the design of a product that makes it unsafe for its intended use.

Ordinary Consumer

The average person who purchases goods or services for personal use, not for manufacture or resale.

Product Liability Laws

Regulations that hold manufacturers, distributors, suppliers, and retailers accountable for any injuries caused by defective or dangerous products.

National Sales

Sales activities that are conducted within a country's borders, focusing on the distribution and marketing of goods and services to domestic consumers.