Maddon Company estimated that its inventory purchases for January and February 2

Question

Maddon Company estimated that its inventory purchases for January and February 2010 would be $300,000 and $370,000, respectively. The company generally pays for 60% of its inventory purchases in the month of purchase because it receives a 2% discount for timely payment. The remaining 40% of purchases are paid for in the following month, and there is no discount for these payments. What will be the amount of cash payments for inventory in February 2010? (Points : 2) $324,400 $337,560 $328,340 $335,160

Explanation / Answer

Payment for Jan = 300000*.4 = 120000 Payment for Feb - (370000-2%)*.60 = 217560 Total = 337560 Please consider the time devoted to make this reply by rating this as 5star. Thank u in advance. God bless u :)

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