Question
Powerdyne Companys cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory for each month equal to 40%
Powerdyne Companys cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory for each month equal to 40% of the next months budgeted cost of good sold. All merchandise is purchased on credit, and 50% of the purchases made during a month is paid for in that month. Another 35% is paid for during the first month after purchase, and the remaining 15% is paid for during the second month after purchase. Expected sales are: August (actual), $150,000; September (actual), $350,000; October (estimated), $200,000; November (estimated), $300,000.
Use this information to determine Octobers expected cash payments for purchases. (Omit the "$" sign in your response.) |
Cash payments for purchases | $ |
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