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Powerdyne Company's cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory each month equal to 40% of
Powerdyne Company's cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory each month equal to 40% of the next month's budgeted cost of goods 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 dollar sales are: | |
August (actual) | $150,000.00 |
September (actual) | $350,000.00 |
October (estimated) | $200,000.00 |
November (estimated) | $300,000.00 |
Use this information to determine October's expected cash payments for purchases.
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