Question

Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: April, $99,000; May, $129,000; and June, $139,000. Payments are made as follows: 70% in the month of purchase and 30% in the month after purchase. The March 31 balance of accounts payable is $41,000. Prepare a schedule of budgeted cash payments for April, May, and June.

Answer 1

Answer and Explanation:

The preparation of a schedule of budgeted cash payment for the three months i.e April, may and June is presented below:

Particulars April May June

Purchase $99,000 $129,000 $139,000

Payment made in

Latest Month (70%) $69,300 $90,300 $97,300

Payment made in

Next Month (30%) $29,700 $38,700 $41,700

Cash Disbursements

Particulars April May June

Payment made in

Current Month (70%) $69,300 $90,300 $97,300

Add:

Last Month

Purchases (30%) $41,000 $29,700 $38,700

Budgeted

Cash Payments $110,300 $120,000 $136,000