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sally automotive is preparing the budget for the first quarter and estimates that budgeted cash purchases will be $106,000, $98,400, and $103,600 for january, february, and march, respectively. the company also purchases on credit and historically pays 40% of its credit purchases in the month of purchase, 50% in the month following purchase, and 10% in the second month after the purchase. credit purchases during this time are expected to be $186,000, $174,800, and $202,000 for january, february, and march, respectively. what amount will be reported for accounts payable on the march balance sheet?

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The amount that will be reported for accounts payable on the March balance sheet is $138,680.

What is an accounts payable?

In accounting, an accounts payable refers to the money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is different from notes payable liabilities which are debts created by formal legal instrument documents.

The computation of accounts payable on the March will be derived as follows:

= (March Credit purchases*0.60) + (February Credit purchases*0.10)

= ($202,000*0.60) + ($174,800*0.10)

= $121,200 + $17,480

=  $138,680

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