Final answer:
The Zisk company's schedule of cash payments for direct materials for April is $82,500, for May is $107,500, and for June is $122,500. These amounts are based on paying 75% of purchases in the month of purchase, and the remaining 25% in the following month.
Step-by-step explanation:
The Zisk company has set up a payment schedule for its direct material purchases that states 75% of purchases are paid in the month of purchase and the remaining 25% in the month following purchase. Using the budgeted purchases for each month, we can prepare a schedule of cash payments for direct materials for April, May, and June.
April Cash Payments
- 75% of April purchases: 0.75 * $85,000 = $63,750
- 25% of March purchases: 0.25 * $75,000 = $18,750
Total: $63,750 (April) + $18,750 (March) = $82,500
May Cash Payments
- 75% of May purchases: 0.75 * $115,000 = $86,250
- 25% of April purchases: 0.25 * $85,000 = $21,250
Total: $86,250 (May) + $21,250 (April) = $107,500
June Cash Payments
- 75% of June purchases: 0.75 * $125,000 = $93,750
- 25% of May purchases: 0.25 * $115,000 = $28,750
Total: $93,750 (June) + $28,750 (May) = $122,500
Please note, the totals calculated are the amounts that will be paid by Zisk company in each respective month for direct materials purchased.