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. Purchases Sales January $250,000 $190,000 February $250,000 $290,000 March $250,000 $330,000 April $230,000 $390,000 May $230,000 $350,000 June $210,000 $330,000 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 $240,000 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 $310,000.) Interest payments of $13,000 are paid quarterly in January and April. Brandon's cash disbursements for the month of April would be

Explanation / Answer

Hi,

Please find the answer as follows:

Cash Disbursements = 230000*.50 + 250000*.25 + 250000*.25 + 390000*.15 + 350000*.25 + 13000 = 399000

Answer is 399000

Thanks.

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