Purchases on account are given below: 55% of the month's purchases will be paid in the month of the purchase; the remaining 45% will be paid in the following month.
How much will the cash payments for purchases be in November?

Question

Purchases on account are given below:  55% of the month's purchases will be paid in the month of the purchase; the remaining 45% will be paid in the following month.
How much will the cash payments for purchases be in November?

Quizplus · Accepted Answer

Budgeted cash payments for inventory in November = (October purchases × Percent paid in month following month of purchase) + (November purchases × Percent paid in month of sale)
Budgeted cash payments for inventory in November = ($30,000 × 45%) + ($40,000 × 55%) = $13,500 + $22,000 = $35,500

Purchases on Account Are Given Below: 55% of the Month's