Dane Inc.has forecast purchases on account to be $465,000 in March,555,000 in April,$630,000 in May,and $735,000 in June.Seventy percent of purchases are paid for in the month of purchase,the remaining 30% are paid in the following month.What are budgeted cash payments for April?

Question

Quizplus · Accepted Answer

In April, Dane Inc. will pay 70% of April's purchases ($555,000 * 70% = $388,500) and 30% of March's purchases ($465,000 * 30% = $139,500). The total cash payments for April are $388,500 + $139,500 = $528,000.

Dane IncHas Forecast Purchases on Account to Be $465,000 in March,555,000