Expected direct materials purchases for Rees Company are $210000 in the first quarter and $270000 in the second quarter.Forty percent of the purchases are paid in cash as incurred and the balance is paid in the following quarter.The budgeted cash payments for purchases in the second quarter are:

Question

Quizplus · Accepted Answer

The expected cash payments for materials purchases in the first quarter are $84,000 (40% of $210,000). 
For the second quarter, 40% of the purchases ($270,000) will be paid in cash, which is $108,000. The remaining 60% of purchases ($162,000) will be paid in the following quarter. 
Therefore, the budgeted cash payments for purchases in the second quarter are $108,000 + $162,000 = $270,000. 
Thus, the correct answer is option C.

Expected Direct Materials Purchases for Rees Company Are $210000 in the First