Answer the Following Questions Using the Information Below

question 127

Multiple Choice

Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation.
• Budgeted sales for January $200,000 and February $100,000.
• Collections for sales are 60% in the month of sale and 40% the next month.
• Gross margin is 30% of sales.
• Administrative costs are $10,000 each month.
• Beginning accounts receivable is $20,000.
• Beginning inventory is $14,000.
• Beginning accounts payable is $65,000. (All from inventory purchases.)
• Purchases are paid in full the following month.
• Desired ending inventory is 20% of next month's cost of goods sold (COGS) .
-For January,budgeted cash payments for purchases are ________.

• A) $100,000
• B) $70,000
• C) $65,000
• D) $50,000

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