Metro, inc. sells backpacks.
the company's accountant is preparing the purchases budget for the first quarter of operations.
metro maintains ending inventory at 20% of the following month's expected cost of goods sold.
expected cost of goods sold for april is $70,000.
all purchases are made on account with 25% of accounts paid in the month of purchase and the remaining 75% paid in the month following the month of purchase:

sales january february march
budgeted cost of goods sold $40,000 $50,000 $60,000
plus: desired ending inventory 10,000
inventory needed 50,000
less: beginning inventory (8,000)
required purchases $42,000

required:

1. based on this information, the total cash paid in march to settle accounts payable is:

a) $39,000.
b) $15,500.
c) $62,000.
d) $54,500.

2. the amount of accounts payable appearing on the march 31 pro forma balance sheet is:

a) $15,500.
b) $46,500.
c) $62,000.
d) none of the above.