Question

the controller is waiting on blossom's budgeted cash disbursements so the cash budget can be wrapped up for next month, but blossom has just received the dm purchases budget from production. that budget shows dm purchases of $90,100 in march and $82,900 in april. blossom generally pays 30% of these purchases in the month of purchase, with the remainder paid the next month. how much should blossom budget for cash disbursements for the month of april? what is the budgeted balance of a/p gone into may?

Answer 1

The budgeted cash disbursements for April should be $85,060. The budgeted balance of A/P going into May is -$2,160.

Step-by-step explanation:

To determine the cash disbursements for April, we need to calculate the amount of cash paid in the month of purchase and the amount paid the next month.

The budgeted cash disbursements for April will be $90,100 x 30% (cash paid in March) + $82,900 x 70% (cash paid in April) = $27,030 + $58,030 = $85,060.

To find the budgeted balance of accounts payable (A/P) going into May, we need to subtract the cash disbursements for April from the total purchases in April.

The budgeted balance of A/P going into May will be $82,900 - $85,060 = -$2,160.