Purchases for May were $100,000, while expected purchases for June and July are $110,000 and $125,000, respectively. All purchases are paid 25% in the month of purchase and 75% the following month. Calculate the budgeted payments for the month of June.

Question

Quizplus · Accepted Answer

In June, 25% of June's purchases ($110,000) are paid, which is $27,500, and 75% of May's purchases ($100,000) are paid, which is $75,000. The total payment for June is $27,500 + $75,000 = $102,500.

Purchases for May Were $100,000, While Expected Purchases for June