Question
Up-Up-and-Away makes high quality parachutes. Its credit sales for the month of July and August were $500,000 and $575,000 respectively. On a monthly basis, it
Up-Up-and-Away makes high quality parachutes. Its credit sales for the month of July and August were $500,000 and $575,000 respectively. On a monthly basis, it records bad debt expense based on half-of-one-percent times credit sales. UUAA expects to buy $60,000 of materials in July, paying for three-quarters of them in the month of purchase and the other one-fourth in the following month. In August, it plans to buy $70,000 of materials. When UUAA makes payments for purchases in the same month as the purchase, it is entitled to a 2% early payment discount, and it capitalizes on this as much as possible. Straight-line depreciation for the year will total $30,000, and is recorded monthly. How much will August's cash disbursements for materials purchases be?
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