The Jack Company is preparing its cash budget for the month of June. The followi

Question

The Jack Company is preparing its cash budget for the month of June. The following information is available concerning its inventories:

Inventories at beginning of June $67,500
Estimated purchases for June $330,000
Estimated cost of goods sold for June $337,500
Estimated payments in June for purchases in May $56,250
Estimated payments in June for purchases prior to May $15,000
Estimated payments in June for purchases in June %80

What are the estimated cash disbursements for inventories in June?
a. $264,000
b. $320,250
c. $335,250
d. $341,250

Explanation / Answer

Cash disbursements for inventories in June = 56250 + 15000 + 330000 x 0.8 = $335250 Thus, (C) is the answer. Hope this helps!

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