Advance Engineering makes payments on its inventory purchases as follows-30% in the month of purchase, 50% in the following month, and 20% in the second month following purchase. Budgeted inventory purchases for June, July, and August are $50,000, $43,000 and $56,000, respectively. At what amount are cash payments for inventory in August budgeted?

Question

Quizplus · Accepted Answer

B) Calculations:
$56,000 × 30% = $16,800
$43,000 × 50% = $21,500
$50,000 × 20% = $10,000
$16,800 + $21,500 + $10,000 = $48,300

Advance Engineering Makes Payments on Its Inventory Purchases as Follows-30