Gilbert Company purchased $40,000 of goods in July and expects to purchase $60,000 of goods in August. Gilbert typically pays for 25% of purchases in the month of purchase and 75% in the following month. What are Gilbert Company's total expected cash disbursements for purchases in the month of August?

Question

Quizplus · Accepted Answer

25% of $60,000 is $15,000, which will be paid in August. The remaining 75% of August's purchases ($45,000) will be paid in September. Therefore, the total expected cash disbursements for purchases in August is $15,000 + $45,000 = $60,000.

Gilbert Company Purchased $40,000 of Goods in July and Expects