Thomario's Powder Coatings makes payments on its inventory purchases as follows: 25% in the month of purchase, 60% in the following month, and 15% in the second month following purchase. Budgeted inventory purchases for June, July, and August are $15,000, $19,000 and $24,000, respectively. At what amount are cash payments for inventory in August budgeted?

Question

Quizplus · Accepted Answer

For August, the cash payments for inventory will include:- 25% of August purchases: 25% of $24,000 = $6,000- 60% of July purchases: 60% of $19,000 = $11,400- 15% of June purchases: 15% of $15,000 = $2,250Adding these amounts together gives: $6,000 + $11,400 + $2,250 = $19,650.

Thomario's Powder Coatings Makes Payments on Its Inventory Purchases as Follows