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It is November 1 of Year 1. Sales for a computer company for November, ...

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Accounting

It is November 1 of Year 1. Sales for a computer company for November,
December, and January (of Year Z) are forecasted to be as follows:
November: $400,000
December: $1,000,000
January: $200,000
On average, the cost of goods sold is 50 w of sales. During this period, the
company expects inventory levels to remain constant. This means that
inventory purchases are expected to equal the amount of cost of goods sold.
100% of purchases are on credit. Of the credit purchases, 5% are paid during
the month of the purchase, 65% in the month following the purchase, and 30%
in the second month following the purchase.
Sales for September and Ottober of Year 1 were $400,000 and $500,000,
respectively.
What is the forecasted amount of total cash payments for purchases in January?
$230,000
$330,000
$385,000
$390,000
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