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

Question

The following data have been taken from the budget reports of Brandon company, a merchandising company.

Fifty percent of purchases are paid for in cash at the time of purchase, and 25% are paid for in each of the next two months. Purchases for the previous November and December were $180,000 per month. Employee wages are 15% of sales for the month in which the sales occur. Selling and administrative expenses are 25% of the following month's sales. (July sales are budgeted to be $250,000.) Interest payments of $25,000 are paid quarterly in January and April. Brandon's cash disbursements for the month of April would be:

The following data have been taken from the budget reports of Brandon company, a merchandising company.

Explanation / Answer

Hi,

Please find the answer as follows:

Cash disbursements = 170000*.50 + 190000*.25 + 190000*.25 + .15*330000 + .25*290000 + 25000 = 327000

Thanks.

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