Final answer:
For September, Quetzaltenango Candle Inc.’s budgeted cash payments for purchases on account include $35,000 for August purchases and $18,000 for September purchases, totaling $53,000.
Step-by-step explanation:
To calculate the budgeted cash payments for purchases on account for Quetzaltenango Candle Inc. for the month of September, we must consider the company's payment structure as well as the budgeted purchases for August and September. According to the company's policy, 30% of purchases are paid in the month of purchase, and the remaining 70% are paid in the following month.
For August purchases of $50,000, the payments in September would be 70% of that amount, which equals $35,000. In addition, the company would also pay 30% of September's budgeted purchases of $60,000, which equals $18,000. Therefore, the total budgeted cash payments for September would be the sum of these two amounts, which is $35,000 + $18,000 = $53,000.
Here's the breakdown:
- Payment for August purchases in September: $50,000 x 70% = $35,000
- Payment for September purchases in September: $60,000 x 30% = $18,000
- Total payments for purchases on account in September: $35,000 + $18,000 = $53,000