Rolling Wheels purchases bicycle components in the month prior to assembling them into bicycles. Assembly is scheduled one month prior to budgeted sales. Rolling pays 75% of component cost in the month of purchase and 25% of the cost in the following month. Component cost included in budgeted cost of sales are
April: $5,000
May: $6,000
June: $7,000
July: $8,000
August: $8,000
What is Rolling's Budgeted cash payment for components in May?
a. $5,750
b. $6,750
c. $7,750
d. $8,000
Answer: C
April: $5,000
May: $6,000
June: $7,000
July: $8,000
August: $8,000
What is Rolling's Budgeted cash payment for components in May?
a. $5,750
b. $6,750
c. $7,750
d. $8,000
Answer: C
CPA Exam
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