15. The Cookie Shops\' purchases are equal to 73 percent of the following month\

Question

15. The Cookie Shops' purchases are equal to 73 percent of the following month's sales. The accounts payable period for purchases is 30 days while all other expenditures are paid in the month in which they are incurred. Assume each month has 30 days. The company has compiled the following information MaJuneJy 8,400 8,800 $9,600 1,300 1,400 1,400 Sales Other expenses Interest and taxes 500 600 700 What is the total amount of the firm's disbursements for the month of June? $8132 O $8.170 $7.410 O $7571 O $8.424

Explanation / Answer

Solution: Answer is 5th option $8,424 Working Notes: Accounts payable are paid in 30 days means purchase made in may is paid in June Purchase in May = June sales x 73 % = $8,800 x 73% = $6,424 Therefore disbursements for the month of June = Payment of purchases of may + Other expense of June + Interest & taxes of June = $6,424 + $1400 + $600 = $8,424 Please feel free to ask if anything about above solution in comment section of the question.

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