Young Co. has budgeted its activity for December according to the following info

Question

Young Co. has budgeted its activity for December according to the following information: 1. Sales at $600,000, all for cash. 2. Budgeted depreciation for December is $15,000. 4. The cash balance at December 1 was $15,000. 5. Selling and administrative expenses are budgeted at $60,000 for December and are paid for in cash. 6. The planned merchandise inventory on December 31 and December 1 is $18,000. 7. The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid in cash. How much are the budgeted cash disbursements for December?

Explanation / Answer

Hi, Please find the answer as follows: Cash Disbursements = 60000 (S&A;) + 600000*.75 (Inventory Cost) = 510000 Thanks, Aman

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