Payne Company provided the following information relevant to its inventory sales and purchases for December 2013 and

Question:

Payne Company provided the following information relevant to its inventory sales and purchases for December 2013 and the first quarter of 2014:

Feb. 2014 Dec. 2013 Jan. 2014 Mar. 2014 (Budgeted) 120,000 (Actual) 80,000 $ (Budgeted) 140,000 $ (Budgeted) 180,000 | $

Desired ending inventory levels are 25% of the following month's projected cost of goods sold. The company purchases all inventory on account. January 2014 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 2014 would be:
a. $132,600.
b. $152,600.
c. $99,000.
d. $159,000.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...