Purchases for May were $100 000, while expected purchases for June and July are $110 000 and $125 000, respectively. All purchases are paid 25% in the month of purchase and 75% the following month. At what amount are June payments for purchases budgeted?
A)$121 250
B)$102 500
C)$107 500
D)$110 000

Question

Quizplus · Accepted Answer

June payments include 25% of June purchases ($110,000 * 25% = $27,500) and 75% of May purchases ($100,000 * 75% = $75,000), totaling $102,500.

Purchases for May Were $100 000, While Expected Purchases for June