Rival Company purchases merchandise on account. In general, the company pays 50% in the month of purchase and 50% in the following month. All payments in the month of purchase qualify for a 2% cash discount. First quarter budgeted purchases are:
January $90,000
February 80,000
March 96,000
Required:
A. Calculate the total cash disbursements expected in February.
B. Calculate the total cash disbursements expected in March.
C. Suppose that there is no cash discount for purchases made in the month of purchase. Recalculate the total cash disbursements expected in February and March.

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The Answer of Rival Company purchases merchandise on account. In general, the company pays 50% in the month of purchase and 50% in the following month. All payments in the month of purchase qualify for a 2% cash discount. First quarter budgeted purchases are:
January $90,000
February 80,000
March 96,000
Required:
A. Calculate the total cash disbursements expected in February.
B. Calculate the total cash disbursements expected in March.
C. Suppose that there is no cash discount for purchases made in the month of purchase. Recalculate the total cash disbursements expected in February and March.

Rival Company Purchases Merchandise on Account