Green Earth's monthly purchases are equal to 70 percent of the following month's sales.The accounts payable period for purchases is 30 days.All other expenses are paid when incurred.Assume each month has 30 days and August sales are $18,500.The company has compiled the following information. What is the projected amount of disbursements for the month of July?

Question

Green Earth's monthly purchases are equal to 70 percent of the following month's sales.The accounts payable period for purchases is 30 days.All other expenses are paid when incurred.Assume each month has 30 days and August sales are $18,500.The company has compiled the following information.  What is the projected amount of disbursements for the month of July?

Quizplus · Accepted Answer

July disbursements = (0.70 × $17,500) + $3,300 + $880 = $16,430

Green Earth's Monthly Purchases Are Equal to 70 Percent of the Following