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Assume that a company prepared the following sales budget: September $ 600,000 November $ 800,000 October $ 750,000 December $ 900,000 The following information is

Assume that a company prepared the following sales budget:

September $ 600,000 November $ 800,000
October $ 750,000 December $ 900,000

The following information is also available:

  • Desired ending inventory is $20,000 plus 70% of the next months cost of goods sold.
  • Cost of goods sold is always 60% of sales.
  • Merchandise purchases are paid 30% in the current month and 70% in the next month.
  • Budgeted sales each month are 70% credit and 30% cash.
  • 40% of credit customers pay in the current month, 50% pay in the first month after the sale, and 10% pay in the second month after the sale.

What are the expected cash disbursements for merchandise purchases for October?

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