Question 3 (7 marks)

Exquisite Shoes are stockists of industry-approved safety boots. The company is planning for the quarter ending in December and has supplied the following information:

Purchases

The forecast purchases of raw materials for the next three months are:

Month Purchases ($)

October 70 000

November 75 000

December 80 000

40% of its purchases are in cash, and the remainder is on credit. Of the credit purchases, 50% is paid in the month of purchase, and the other 50% is paid in the month after the purchase. The September 30 accounts payable balance is $30 000

Required:

A schedule of expected cash disbursements for each of the three months (October - December), including the total cash payments of raw materials for the quarter. (5 marks)