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Burr, Inc. provided the following information: July August Projected sales $220,000 $260,000 Projected merchandise purchases $150,000 $180,000 Burr estimates that it will collect 60% of
Burr, Inc. provided the following information:
July August
Projected sales $220,000 $260,000
Projected merchandise purchases $150,000 $180,000
- Burr estimates that it will collect 60% of its sales in the month of sale, 35% in the month after the sale, and 22% in the second month following the sale. Fivepercent of all sales are estimated to be bad debts.
(Cont.)
- Burr pays 30% of merchandise purchases in the month purchased and 70% in the following month.
- General operating expenses are budgeted to be $20,000 per month of which depreciation is $2,000 of this amount. Burr pays operating expenses in the month incurred.
- Burr makes loan payments of $3,000 per month of which $400 is interest and the remainder is principal.
Instructions
Calculate Burr's budgeted cash disbursements for August.
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