Solomon Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory:

	April			May			June
Required purchases (on account)	$	115,000		$	135,000		$	147,000

Solomon Books’ accountant prepared the following schedule of cash payments for inventory purchases. Solomon Books’ suppliers require that 85 percent of purchases on account be paid in the month of purchase; the remaining 15 percent are paid in the month following the month of purchase.

Required

1. Complete the schedule of cash payments for inventory purchases by filling in the missing amounts

2. Schedule of Cash Payments for Inventory Purchases
   	April	May	June
   Payment for current accounts payable	$97,750
   Payment for previous accounts payable	11,000
   Total budgeted payments for inventory	$108,750

1. 2. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter.

Answer rating: 100% (QA)

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