Reed Merchandising Company expects to purchase $90,000 of materials in July and
ID: 2381414 • Letter: R
Question
Reed Merchandising Company expects to purchase $90,000 of materials in July and $105,000 of materials in August. Three-quarters of all purchases are paid for in the month of purchase, and the other one-fourth are paid for the month following the month of purchase. How much will August's cash disbursements for material purchases be?Question 33 options: $67500 $78750 $101250 $105000 Reed Merchandising Company expects to purchase $90,000 of materials in July and $105,000 of materials in August. Three-quarters of all purchases are paid for in the month of purchase, and the other one-fourth are paid for the month following the month of purchase. How much will August's cash disbursements for material purchases be?
Reed Merchandising Company expects to purchase $90,000 of materials in July and $105,000 of materials in August. Three-quarters of all purchases are paid for in the month of purchase, and the other one-fourth are paid for the month following the month of purchase. How much will August's cash disbursements for material purchases be?
$67500 $78750 $101250 $105000 $67500 $78750 $101250 $105000 $67500 $78750 $101250 $105000
Explanation / Answer
Hi,
Please find the answer as follows;
Cash Disbursement = 105000*3/4 (August) + 90000*1/4 (July) = 101250
Option C is correct.
Thanks.