Expected direct materials purchases for Wade Company are $630000 in the first quarter and $810000 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 purchases in the first quarter = 40% of $630000 = $252000
The expected cash payments for purchases in the second quarter = 40% of $810000 = $324000
Therefore, the total expected cash payments for the first and second quarters = $252000 + $324000 = $576000

The remaining balance (60%) of the second-quarter purchases ($486000) will be paid in the following quarter. Therefore, the total cash payments for purchases in the second quarter that will be paid in the following quarter = $486000.

So, the total budgeted cash payments for purchases in the second quarter = $324000 + $486000 = $810000.

Hence, the best choice is C.

Expected Direct Materials Purchases for Wade Company Are $630000 in the First