Please, someone, explain this problem more in details. Thank you in advance! A c
ID: 2417654 • Letter: P
Question
Please, someone, explain this problem more in details. Thank you in advance!
A company pays for 25 percent of its purchases by credit terms n/60, 40 percent of its purchases by credit terms n/30, and the remaining 35 percent by a two-month advance payment. The sources for June's cash payments schedule for direct materials would not include which of the following?
A company pays for 25 percent of its purchases by credit terms n/60, 40 percent of its purchases by credit terms n/30, and the remaining 35 percent by a two-month advance payment. The sources for June's cash payments schedule for direct materials would not include which of the following?
Explanation / Answer
A. June's schedule of expected cash payments for direct materials
25 percent of its purchases by credit terms n/60 = April and May 25% purchases included in June Cash Payments
40 percent of its purchases by credit terms n/30 = 40% of May purchases included in June cash payments
35 percent by a two-month advance payment = 35% of July and August included in June Cash payments