Matting’s Ice Cream Co. pays 30% of its purchases on account in the month of the

Question

Matting’s Ice Cream Co. pays 30% of its purchases on account in the month of the purchase and 70% in the month following the purchase. If purchases are budgeted to be $75,000 for October and $45,000 for November, what are the budgeted cash payments for purchases on account for November Matting’s Ice Cream Co. pays 30% of its purchases on account in the month of the purchase and 70% in the month following the purchase. If purchases are budgeted to be $75,000 for October and $45,000 for November, what are the budgeted cash payments for purchases on account for November

Explanation / Answer

Budgeted cash payments for the month of November

Particular. Amount ($)

Payment in the month of October

Purchase ($ 75000* 70%). $ 52,500

Payment in the month of November

Purchase ($45000* 30%) $ 13,500

Cash payments in the month . $ 66,000

Of November ($52,500 + $13,500)

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