Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: Apri

Question

Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: April, $84,000; May, $114,000; and June, $124,000. Payments are made as follows: 75% in the month of purchase and 25% in the month after purchase. The March 31 balance of accounts payable is $26,000. Prepare a schedule of budgeted cash payments for April, May, and June. June Current month purchases Ending accounts payable Total purchases April May 75% $ 21,000 25% $ 21,000 $ 0 $ Zisk Co. Schedule of Cash Payments For April, May, and June April May June Cash payments for: Current month purchases $ 21,000 Prior month purchases Budgeted cash payments for materials

Explanation / Answer

April May June Current month purchases 75% 63000 85500 93000 Ending accounts payable 25% 21000 28500 31000 Total purchases 84000 114000 124000 2 April May June Cash payments for: Current month purchases 63000 85500 93000 Prior month purchases 26000 21000 28500 Budgeted payments 89000 106500 121500

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