The Jack Company is preparing its cash budget for the month of June.The following information is available concerning its inventories: What are the estimated cash disbursements for inventories in June?

Question

The Jack Company is preparing its cash budget for the month of June.The following information is available concerning its inventories:  What are the estimated cash disbursements for inventories in June?

Quizplus · Accepted Answer

The estimated cash disbursements for inventories in June can be calculated by adding the total purchases for the month to the beginning inventory and subtracting the ending inventory.

Total purchases for June = $390,000
Beginning inventory = $140,000
Ending inventory = $95,000

Total disbursements for inventories in June = $390,000 + $140,000 - $95,000 = $335,000.

Therefore, the estimated cash disbursements for inventories in June are $335,000, which corresponds to option C.

The Jack Company Is Preparing Its Cash Budget for the Month