Chain Inc. provided the following information:

$\begin{array}{llcc}
& \text { April } & \text {May } & \text { June } \
\text { Projected merchandise purchases } &\$ 92,000 & \$ 80,000 & \$ 6,000\
\end{array}$
Chain pays 40% of merchandise purchases in the month purchased and 60% in the following month.
$\bullet$General operating expenses are budgeted to be $31000 per month of which depreciation is $3000 of this amount. Chain pays operating expenses in the month incurred.
$\bullet$Chain makes loan payments of $4000 per month of which $450 is interest and the remainder is principal.
Instructions
Calculate budgeted cash disbursements for May.

Question

Chain Inc. provided the following information:

$\begin{array}{llcc}
& \text {  April } &  \text {May  } &  \text { June } \
\text { Projected merchandise purchases } &\$ 92,000 & \$ 80,000 & \$ 6,000\
\end{array}$
  Chain pays 40% of merchandise purchases in the month purchased and 60% in the following month.
$\bullet$General operating expenses are budgeted to be $31000 per month of which depreciation is $3000 of this amount. Chain pays operating expenses in the month incurred.
$\bullet$Chain makes loan payments of $4000 per month of which $450 is interest and the remainder is principal.
Instructions
Calculate budgeted cash disbursements for May.

Quizplus · Accepted Answer

The Answer of Chain Inc. provided the following information:

$\begin{array}{llcc}
& \text {  April } &  \text {May  } &  \text { June } \
\text { Projected merchandise purchases } &\$ 92,000 & \$ 80,000 & \$ 6,000\
\end{array}$
  Chain pays 40% of merchandise purchases in the month purchased and 60% in the following month.
$\bullet$General operating expenses are budgeted to be $31000 per month of which depreciation is $3000 of this amount. Chain pays operating expenses in the month incurred.
$\bullet$Chain makes loan payments of $4000 per month of which $450 is interest and the remainder is principal.
Instructions
Calculate budgeted cash disbursements for May.

Chain Inc Provided the Following Information Chain Pays 40% of Merchandise Purchases in the Month Purchased