| The following data have been taken from the budget reports of Brandon company, a merchandising company. |
| Purchases | Sales | |
| January | $240,000 | $180,000 |
| February | $240,000 | $280,000 |
| March | $240,000 | $320,000 |
| April | $220,000 | $380,000 |
| May | $220,000 | $340,000 |
| June | $200,000 | $320,000 |
| Sixty percent of purchases are paid for in cash at the time of purchase, and 20% are paid for in each of the next two months. Purchases for the previous November and December were $230,000 per month. Employee wages are 10% of sales for the month in which the sales occur. Selling and administrative expenses are 20% of the following month’s sales. (July sales are budgeted to be $300,000.) Interest payments of $20,000 are paid quarterly in January and April. Brandon’s cash disbursements for the month of April would be: |
rev: 10_27_2011
$328,000
$280,000
$220,000
$354,000
The working notes for the above answer is as follow
Cash disbursements flow for the Aprill will be as follow
| Particular | Amount |
| Purchase of apriil ( 220,000*60%) | 132,000 |
| Purchase of March (240,000 *20%) | 48,000 |
| Puchase of February(240,000 *20%) | 48,000 |
| Employee wages (380,000*10%) | 38,000 |
| Selling and admin Expenses (340,00 | 68,000 |
| Interest expenses | 20,000 |
| Total | 354,000 |
