Reference no: EM132791577

The company starts the month of October with following accounts balances:

Cash 26,000

Accounts Receivable 80,000

Prepaid expenses 12,000

Merchandise Inventory 30,000

Accounts Payable 50,000

Accrued expenses 8,000

• The company expected to have prepaid expenses of 20,000 and accrued expenses 12,000 by October 31.
• The budgeted sales, all on credit and purchases for the month are 400,000 and 280,000, respectively. Operating expenses to be recognized during October are 115,000. Sales are uniformly collected, 60% during the month of sales and the remainder the following month. Accounts payable on purchase of merchandise is paid 50% at month of purchase and the other half in the first month.

Problem 1: The accounts payable on purchase of goods to be paid during October is

a. 140000

b. 218000

c. 162000

d. 190000