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EB11.

LO 7.3Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?

User John Bush
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Answer:

Q. Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?

February 2018 $90,000, March 2018 92,000, April 2018 101,000, May 2018 98,000, June 2018 99,500.

Answer) $440,775

Step-by-step explanation:

Cash payments to be made in 2018 for the purchases given in question are:

Feb 2018 Mar 2018 Apr 2018 May 2018 June 2018

Cash Payments

65% of $90,000 58,500

30% of $90,000 27,000

5% of $90,000 4,500

65% of $92,000 59,800

30% of $92,000 27,600

5% of $92,000 4,600

65% of $101,000 65,650

30% of $101,000 30,300

5% of $101,000 5,050

65% of $98,000 63,700

30% of $98,000 29,400

65% of $99,500 64,675

Total $58,500 $86,800 $97,750 $98,600 $99,125

Total payments in 2018=$440,775

(58,500+86,800+97,750+98,600+99,125)

User AnotherOne
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