7 of 8 (5 complete) Lough Company prepared the following purchases budget Month

ID: 2394629 • Letter: 7

Question

7 of 8 (5 complete) Lough Company prepared the following purchases budget Month June July August September October Budgeted Purchases $38,000 $44,000 $38,900 $53,000 $49,800 8 All purchases are paid for as follows: 15% two months after purchase, 40% in the following month, and 45% in the month of purchase What are the total cash disbursements in August to account for the purchase of merchandise at Lough Company? OA. $17.505 O B. $40.805 O C. $49,445 O D. $40.535 Click to select your answer Study Plan Practice... Take a Test- Mitch...

Explanation / Answer

Particulars

Amount ($)

For June Month Purchase [$38,000 x 15%]

5,700

For July Month Purchase [$44,000 x 40%]

17,600

For August Moth Purchase [$38,900 x 45%]

17,505

Total Cash Disbursements in August

40,805

Total Cash Disbursements in August for the purchase of Merchandise Inventory = $40,805

Hence, The Answer is “B. $40,805”