Question

Waterway Industries expects to purchase $260000 of materials in July and $270000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be

Answer 1

Total cash disbursement= $267,500

Step-by-step explanation:

Giving the following information:

Purchase:

July= $260,000

August= $270,000

Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase.

Cash disbursement August:

Purchase in cash from August= 270,000*0.75= 202,500

Purchase on account July= 260,000*0.25= 65,000

Total cash disbursement= $267,500