Month Budgeted Purchases June $67,000 July 72,500 August 76,300 September 73,700
ID: 2381944 • Letter: M
Question
Month Budgeted Purchases
June $67,000
July 72,500
August 76,300
September 73,700
October 69,200
All purchases are paid for as follows: 10% in the month of purchase, 50% in the following month, and 40% two months after purchase.
1.
What are the cash disbursements in August for June purchases?
2.
What are the cash disbursements in October for September purchases?
3.
What are the total cash disbursements in August for the purchase of merchandise?
4.
What are the total cash disbursements in October for the purchase of merchandise?
Explanation / Answer
Month Budgeted Purchases
June $67,000
July 72,500
August 76,300
September 73,700
October 69,200
All purchases are paid for as follows: 10% in the month of purchase, 50% in the following month, and 40% two months after purchase.
1.
What are the cash disbursements in August for June purchases?
the cash disbursements in August for June purchases = 67000*40% = $ 26800
2.
What are the cash disbursements in October for September purchases?
the cash disbursements in October for September purchases = 50%*73700 = $ 36850
3.
What are the total cash disbursements in August for the purchase of merchandise?
The total cash disbursements in August for the purchase of merchandise = 67000*40% + 50%*72500 + 10%*76300
= $ 70680
4.
What are the total cash disbursements in October for the purchase of merchandise?
The total cash disbursements in October for the purchase of merchandise = 76300*40% + 50%*73700 + 10%*69200
= $ 74290