The following data have been taken from the budget reports of company, a merchan

Question

The following data have been taken from the budget reports of company, a merchandising company. Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid for in each of the next two months. Purchases for the previous November and December were $150,000 per month. Employee wages are 10% of sales for the month in which the sales occur Selling and administrative expenses are 20% of the following month's sales. (July sales are budgeted to be $220,000.) Interest payments of $20,000 are paid quarterly in January and April. Brandon's cash disbursements for the month of April would be: $140,000 $254,000 $200,000 $248,000

Explanation / Answer

Cash disbursements for the month of April For February Purcahses (160000*30%) 48000 For march Purchase (160000*30%) 48000 for april Purchases (140000*40%) 56000 Employees wages (10%*300000) 30000 Selling and Administrative expenses (20%*260000) 52000 Interest expense 20000 Total Disbursements of april 254000 Ans B $254000

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