Question

Garda purchased $530,000 of merchandise in August and expects to purchase $670,000 in September. Merchandise purchases are paid as follows: 35% in the month of purchase and 65% in the following month. Compute cash payments for merchandise for September.

Answer 1

Answer:

$579,000

Explanation:

The cash payment in September would be made of 35% purchases in September and 65% of the purchase made in August (the previous month).

Hence

Cash payment in September = (35% × $670,000) + (65% × $530,000)

= $579,000

the cash payment for September is $579,000