The treasurer of U Co. has accumulated the budget information presented in the t
ID: 2524134 • Letter: T
Question
The treasurer of U Co. has accumulated the budget information presented in the table for the months of March and April pertaining to cash payments. Forty percent of the merchandise costs are expected to be paid in the month they are incurred and the remaining sixty percent in the following month. All of the operating expenses are paid for by cash in the month they are incurred. The accounts payable balance on March 1 is $60,000.
What is the amount to include in the Cash Budget for the month of April for the Merchandise Costs?
MARCH
APRIL
Merchandise costs
$120,000
$132,000
Operating expenses
100,000
110,000
MARCH
APRIL
Merchandise costs
$120,000
$132,000
Operating expenses
100,000
110,000
Explanation / Answer
Determination of the amount to include in the Cash Budget for the month of April for the Merchandise Costs:
April For March $120,000 X 60% = $72,000 For April $132,000 x 40% = $52,800 Cash payment $124,800Related Questions
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