Turley Corp. had $25,000 of Accounts Payable at the beginning of October 2010. Turley pays for 60% of its inventory purchases in the month of purchase and 40% in the month after purchase. Monthly expenses (other than inventory purchases) were budgeted as follows:

Of the total monthly expenses, $260,000 is for salaries and $15,000 is for depreciation. Turley pays for 80% of its non-salary cash expenses in the month of the expense and 20% in the subsequent month. In addition, Turley planned to declare a $19,000 cash dividend in November payable in December.
Required:
a. What were Turley's total purchases of inventory in September?
b. Calculate Turley's estimated cash disbursements for October through December 2010.

Question

Turley Corp. had $25,000 of Accounts Payable at the beginning of October 2010. Turley pays for 60% of its inventory purchases in the month of purchase and 40% in the month after purchase. Monthly expenses (other than inventory purchases) were budgeted as follows:
  
Of the total monthly expenses, $260,000 is for salaries and $15,000 is for depreciation. Turley pays for 80% of its non-salary cash expenses in the month of the expense and 20% in the subsequent month. In addition, Turley planned to declare a $19,000 cash dividend in November payable in December.
Required:
a.	What were Turley's total purchases of inventory in September?
b.	Calculate Turley's estimated cash disbursements for October through December 2010.

Quizplus · Accepted Answer

The Answer of Turley Corp. had $25,000 of Accounts Payable at the beginning of October 2010. Turley pays for 60% of its inventory purchases in the month of purchase and 40% in the month after purchase. Monthly expenses (other than inventory purchases) were budgeted as follows:
  
Of the total monthly expenses, $260,000 is for salaries and $15,000 is for depreciation. Turley pays for 80% of its non-salary cash expenses in the month of the expense and 20% in the subsequent month. In addition, Turley planned to declare a $19,000 cash dividend in November payable in December.
Required:
a.	What were Turley's total purchases of inventory in September?
b.	Calculate Turley's estimated cash disbursements for October through December 2010.