Donald Company has the following information: $$\begin{array}{l}
\begin{array} { l r }
\text { Month Budgeted} &\text { Purchases }\
\text { January } & \$ 30,000 \
\text { February } & 29,000 \
\text { March } & 30,520 \
\text { April } & 29,480 \
\text { May } & 27,680
\end{array}
\end{array}$$ Purchases are paid for in the following manner: 10% in the month of purchase
50% in the month after purchase
40% two months after purchase
_____ is the estimated cash disbursement in March from January purchases.
A)$12,000
B)$13,400
C)$3,052
D)$12,208

Question

Donald Company has the following information: $$\begin{array}{l}
\begin{array} { l r } 
\text { Month Budgeted} &\text { Purchases }\
\text { January } & \$ 30,000 \
\text { February } & 29,000 \
\text { March } & 30,520 \
\text { April } & 29,480 \
\text { May } & 27,680
\end{array}
\end{array}$$ Purchases are paid for in the following manner: 10% in the month of purchase
50% in the month after purchase
40% two months after purchase
_____ is the estimated cash disbursement in March from January purchases.
A)$12,000
B)$13,400
C)$3,052
D)$12,208

Quizplus · Accepted Answer

The estimated cash disbursement in March from January purchases is $12,000. This is calculated as 40% of January's purchases ($30,000 * 40% = $12,000), since the payment structure indicates that 40% of purchases are paid two months after the purchase.

Donald Company Has the Following Information Purchases Are Paid for in the Following Manner: 10% in }