Hillbrant Company purchased $40,000 of goods in July and expects to purchase $60,000 of goods in August. Hillbrant typically pays for 25% of purchases in the month of purchase and 75% in the following month. What total expected cash disbursements for purchases should Hillbrant Company expect to pay in August?

Question

Quizplus · Accepted Answer

Hillbrant will pay 75% of July's purchases ($40,000 * 0.75 = $30,000) and 25% of August's purchases ($60,000 * 0.25 = $15,000) in August. Total disbursements in August = $30,000 + $15,000 = $45,000.

Hillbrant Company Purchased $40,000 of Goods in July and Expects