Asked by Sierra Ballard on Jul 08, 2024
Verified
Garnett Co. expects to purchase $180000 of materials in July and $210000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?
A) $135000
B) $157500
C) $202500
D) $210000
Cash Disbursements
Money being paid out by a company during a period, including expenses, debt payments, and purchase of assets, usually tracked through a cash disbursements journal.
Materials Purchases
The total cost of raw materials bought by a company for use in its manufacturing process during a specific period.
- Assess and figure out the anticipated expenditures and payments related to direct materials.
Verified Answer
JT
Jazbeth TrevinoJul 10, 2024
Final Answer :
C
Explanation :
July's cash disbursement for materials purchase = 0.75 x $180000 = $135000
August's cash disbursement for materials purchased in August = 0.75 x $210000 = $157500
August's cash disbursement for materials purchased in July = 0.25 x $180000 = $45000
Total cash disbursement in August = $157500 + $45000 = $202500
August's cash disbursement for materials purchased in August = 0.75 x $210000 = $157500
August's cash disbursement for materials purchased in July = 0.25 x $180000 = $45000
Total cash disbursement in August = $157500 + $45000 = $202500
Learning Objectives
- Assess and figure out the anticipated expenditures and payments related to direct materials.
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