53) Olson Company has the following data April 0,000 220,000 150,000 Purchases a

Question

53) Olson Company has the following data April 0,000 220,000 150,000 Purchases are paid as follows 10% in the month of purchase 80% one month after Purchase 10% two months after purchase Required Prepare a schedule of cash disbursements for pu Answer January February rchases for March, April and May March 522,500 152,000$19,000 160,000 176,000 20,000 April May Total Diff: 2 LO: 7-7 AACSB: Analytic skills 194.500 $201.000 Learning Outcome: Discuss basic budgeting concepts and identify and prepare the budgets that comprise the master budget man i00 52 0

Explanation / Answer

CALUCLATION OF BUDGETED CASH PAYMENTS FOR MATERIALS Particulars January February March April May Budgeted Purchases $       2,25,000 $        1,90,000 $          2,00,000 $   2,20,000 $ 1,50,000 Payment will be made as Follows 10 % in the month of Purhase $           22,500 $            19,000 $              20,000 $       22,000 $      15,000 80% in the next month of Purchases(Example: For January Paid in February) $        1,80,000 $          1,52,000 $   1,60,000 $ 1,76,000 10% in Two months after purchase (Example : For January paid in March) $              22,500 $       19,000 $      20,000 Total Payments made From March To May = $          1,94,500 $   2,01,000 $ 2,11,000

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