Use the Following Information for Questions
Livanos, Inc Customer Amounts on Account Are Collected 70% in the Month

question 129

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 2016 are: $$\begin{array} { l c c c c c } & \text { March } & \text { April } & \text { May } & \text { June } & \text { July } \\\text { Budgeted sales } & \$ 300,000 & \$ 290,000 & \$ 320,000 & \$ 280,000 & \$ 210,000 \\\text { Budgeted purchases } & \$ 144,000 & \$ 120,000 & \$ 128,000 & \$ 132,000 & \$ 90,000\end{array}$$ 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 31, 2016?

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

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