Harry & Sons makes all of its purchases on credit; 50% are paid in the month of purchase; 30% during the month following the purchase and 20% in the second month following the purchase. Given the following data, determine the cash paid to creditors during June.
April May June
Credit Purchases $50 000 $80 000 $60 000

Question

Quizplus · Accepted Answer

In June, Harry & Sons will pay 20% of April's purchases ($50,000 * 20% = $10,000), 30% of May's purchases ($80,000 * 30% = $24,000), and 50% of June's purchases ($60,000 * 50% = $30,000). Total cash paid = $10,000 + $24,000 + $30,000 = $64,000.

Harry & Sons Makes All of Its Purchases on Credit;