The Vallejo Company expects purchases for 2016 to be $160,000 in the first quarter, $240,000 in the second quarter, $190,000 in the third quarter, and $300,000 in the last quarter. All purchases are made on credit. 90% of purchases are paid for in the quarter purchased; 10% are paid for in the quarter following purchase. Other cash expenses paid each quarter are: taxes, $40,000; wages, $120,000; rent, $16,000; interest, $4,000; and miscellaneous, $3,000. If the company plans to pay off $20,000 in notes in the fourth quarter of 2016, planned cash disbursements in the fourth quarter will be:

A. $472,000

B. $473,000

C. $453,000

D. $492,000

E. none of the above

Answer rating: 100% (QA)

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