Use the percent of sales method to forecast next year’s accounts payable.

Use the percent of sales method to forecast next year’s accounts payable. Current year sales are $24,500,000 and sales are expected to rise by 25%. The firm’s accounts payable balance is $1,701,600. What is the projection for next year’s accounts payable?
a. $1,000,600
b. $2,127,000
c. $3,981,250
d. $6,125,000

 

Solution