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Atomic Air, Inc. sells athletic wear to retail stores with clientele looking for something unique and different. The company has been working through a budgeting process to help them make better managerial decisions regarding the future. Atomic Air's accountants have pulled together the following information and estimates: • Sales are budgeted at $291,000 for January, $311,000 for February, and $211,000 for March. • The company expects to collect 70% from its customers in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales. . The desired ending inventory at the end of each month is equal to 80% of the next month's cost of goods sold. . All inventory purchases are paid in the month following the purchase. • Other monthly expenses to be paid in cash are $21,200. . Monthly depreciation is $21,500. . Ignore taxes. Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity Estimated accounts payable at the end of February would be: Multiple Choice OOOO $126,600 Balance Sheet December 31 $173.250 $46,650 $233,250 $ 25,500 77,500 174,600 1,027,000 $ 1,304,600 $ 240,000 741,000 323,600 $ 1,304,600

Atomic Air, Inc. sells athletic wear to retail stores with clientele looking for something unique and different. The company has been working through a budgeting process to help them make better managerial decisions regarding the future. Atomic Air's accountants have pulled together the following information and estimates: • Sales are budgeted at $291,000 for January, $311,000 for February, and $211,000 for March. • The company expects to collect 70% from its customers in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales. . The desired ending inventory at the end of each month is equal to 80% of the next month's cost of goods sold. . All inventory purchases are paid in the month following the purchase. • Other monthly expenses to be paid in cash are $21,200. . Monthly depreciation is $21,500. . Ignore taxes. Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity Estimated accounts payable at the end of February would be: Multiple Choice OOOO $126,600 Balance Sheet December 31 $173.250 $46,650 $233,250 $ 25,500 77,500 174,600 1,027,000 $ 1,304,600 $ 240,000 741,000 323,600 $ 1,304,600

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 3PB: TIB makes custom guitars and prepared the following sales budget for the second quarter It also has...
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Atomic Air, Inc. sells athletic wear to retail stores with clientele looking for something unique and different. The company has been working through a budgeting process to help them make better managerial decisions regarding the future. Atomic Air's accountants have pulled together the following information and estimates: • Sales are budgeted at $291,000 for January, $311,000 for February, and $211,000 for March. • The company expects to collect 70% from its customers in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales. • The desired ending inventory at the end of each month is equal to 80% of the next month's cost of goods sold. • All inventory purchases are paid in the month following the purchase. • Other monthly expenses to be paid in cash are $21,200. Monthly depreciation is $21,500. . Ignore taxes. Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity Estimated accounts payable at the end of February would be: Multiple Choice O O $126,600 Balance Sheet December 31 $173,250 $46,650 $233,250 $ 25,500 77,500 174,600 1,027,000 $ 1,304,600 $ 240,000 741,000 323,600 $ 1,304,600
Transcribed Image Text:Atomic Air, Inc. sells athletic wear to retail stores with clientele looking for something unique and different. The company has been working through a budgeting process to help them make better managerial decisions regarding the future. Atomic Air's accountants have pulled together the following information and estimates: • Sales are budgeted at $291,000 for January, $311,000 for February, and $211,000 for March. • The company expects to collect 70% from its customers in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales. • The desired ending inventory at the end of each month is equal to 80% of the next month's cost of goods sold. • All inventory purchases are paid in the month following the purchase. • Other monthly expenses to be paid in cash are $21,200. Monthly depreciation is $21,500. . Ignore taxes. Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity Estimated accounts payable at the end of February would be: Multiple Choice O O $126,600 Balance Sheet December 31 $173,250 $46,650 $233,250 $ 25,500 77,500 174,600 1,027,000 $ 1,304,600 $ 240,000 741,000 323,600 $ 1,304,600
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