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SashulF [63]
3 years ago
14

Preparing an Accounts Payable Schedule Pilsner Inc. purchases raw materials on account for use in production. The direct materia

ls purchases budget shows the following expected purchases on account: April $374,400 May 411,200 June 416,000 Pilsner typically pays 25% on account in the month of billing and 75% the next month.Required: 1. How much cash is required for payments on account in May?
2. How much cash is expected for payments on account in June?
Business
2 answers:
n200080 [17]3 years ago
4 0

Answer:

1. Cash required for payment in May - $383,600

2. Cash expected for payment in June - $412,400

Explanation:

Payments are made in two parts for the purchase of direct materials. From which 25% is being paid in the same month as bill and remainder (75%) in the next month. Therefore, the cash required for May would be calculated as follows:

$411,200 x 25% = $102,800 (Payment made same month)

$374,400 x 75% = $280,800 (Payment for the previous month, April)

Cash Required for payment in May is $383,600 ($102,800 + $280,800)

Cash expected for payments for June would be as follows:

$416,000 x 25% = $104,000 (Payment made same month)

$411,200 x 75% = $308,400 (Payment for the previous month, May)

Cash Expected for payment in June is $412,400 ($104,000 + $308,400)

Ganezh [65]3 years ago
3 0

Answer:

1. $383 300 is due for the month of May.

2. $412 400 is due for the month of June

Explanation:

1. May = ($374000 * 75% from April purchases) + ($411 200 * 25% from May purchases)

= $280 500 + $102 800  

= $383 300 is due for the month of May

2. June = ($411 200 * 75% from May purchases) + ($416 000 * 25% from June purchases)  

= $308 400 + $104 000

= $412 400 is due for the month of June

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