Payne Company Provided the Following Information Relevant to Its Inventory

question 107

Multiple Choice

Payne Company provided the following information relevant to its inventory sales and purchases for December Year 1 and the first quarter of Year 2: Desired ending inventory levels are 25% of the following month's projected cost of goods sold. The company purchases all inventory on account. January Year 2 budgeted purchases are $150,000. The normal schedule for inventory payments is 60% payment in month of purchase and 40% payment in month following purchase.Budgeted cash payments for inventory in February Year 2 would be: $$\begin{array} { | l | c | c | c | c | } \hline & \text { Dec. Year 1 } & \text { Jan. Year 2 } & \text { Feb. Year 2 } & \text { Mar. Year 2 } \\\hline & \text { (Actual) } & \text { (Budgeted) } & \text { (Budgeted) } & \text { (Budgeted) } \\\hline \text { Cost of goods sold } & \$ 80,000 & \$ 140,000 & \$ 180,000 & \$ 120,000 \\\hline\end{array}$$

• A) $132,600.
• B) $152,600.
• C) $99,000.
• D) $159,000.

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Definitions:

Retrograde Amnesia

A form of amnesia in which an individual loses memories for events that occurred prior to a certain point, often due to brain injury or traumatic events.

Past Memories

Recollections of events or experiences from an individual's previous life.

Spreading Activation Model

A theory in cognitive science that explains how information is retrieved in the brain, suggesting that thoughts spread across the brain's network of neurons based on their associations.

Procedural Memory

A type of implicit memory that involves motor skills and behavioral habits.