Drake Company has the following information: $$\begin{array} { l l }
\text { Month } & \text { Budgeted Purchases } \
\text { January } & \$ 26,800 \
\text { February } & 29,000 \
\text { March } & 30,520 \
\text { April } & 29,480 \
\text { May } & 27,680
\end{array}$$ 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 total estimated cash disbursement in May from the purchase of merchandise.

Question

Drake Company has the following information: $$\begin{array} { l l } 
\text { Month } & \text { Budgeted Purchases } \
\text { January } & \$ 26,800 \
\text { February } & 29,000 \
\text { March } & 30,520 \
\text { April } & 29,480 \
\text { May } & 27,680
\end{array}$$ 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 total estimated cash disbursement in May from the purchase of merchandise.

Quizplus · Accepted Answer

In May, Drake Company will pay 40% of March purchases ($30,520 * 0.40 = $12,208), 50% of April purchases ($29,480 * 0.50 = $14,740), and 10% of May purchases ($27,680 * 0.10 = $2,768). The total is $12,208 + $14,740 + $2,768 = $29,716.

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