ABC Companys raw materials purchases for June, July, and August are budgeted at $35,000, $25,000, and $50,000,

Question:

ABC Company’s raw materials purchases for June, July, and August are budgeted at $35,000, $25,000, and $50,000, respectively. Based on past experience, ABC expects that 60% of a month’s raw material purchases will be paid in the month of purchase and 40% in the month following the purchase.


Required:

Prepare an analysis of cash disbursements from raw materials purchases for ABC Company for August.

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Accounting What the Numbers Mean

ISBN: 978-1260565492

12th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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