X Company has the following information from its purchases b

X Company has the following information from its purchases budget, payroll budget and capital expenditures budget.

The company pays for all of its purchases of inventory in the month following the purchase. It pays 50% of its payroll in the month the wages are earned and 50% in the next month and it pays for all captial expensditures in the month of the purchase.

Compute the total budgeted accounts payable and wages payable on February 28.

		Budgeted
		Inventory				Capital
Month		Purchases		Payroll		Expenditures		Depreciation
January		$ 80,000		$40,000		$10,000		$15,000
February		100,000		$50,000		$12,000		$15,000
March		70,000		$60,000		$14,000		$15,000

Solution

As on feb 28 Accounts payable 100,000 Wages payable Feb 50,000*50%= 25,000