Question

Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid for in each of the next two months. Purchases for the previous November and December were $150,000 per month. Employee wages are 10% of sales for the month in which the sales occur. Selling and administrative expenses are 20% of the following month's sales. (July sales are budgeted to be $220,000.) Interest payments of $20,000 are paid quarterly in January and April. Brandon's cash disbursements for the month of April would be:

Answer 1

B. $254,000

Step-by-step explanation:

5April Purchases X 40% =$ 56,000

March Purchases X 30% =48,000

February Purchases X 30% = 48,000

April Sales (salaries) X 10% = 30,000

May Sales (S & A Exp) X 20% = 52,000

April Interest Payment = 20,000

TOTAL$254,000

Brandon's cash disbursements for the month of April would be:$254,000