Question

​Hammond's Cookie Toppings makes payments on its inventory purchases as​ follows: 30% in the month of​ purchase, 65% in the following​ month, and​ 5% in the second month following purchase. Budgeted inventory purchases for​ June, July, and August are​ $16,000, $19,000 and​ $22,000, respectively. What is the budgeted amount of cash payments to account for inventory in August at​ Hammond's Cookie​ Toppings?

Answer 1

Answer:

Total Cash= $19,750

Explanation:

Giving the following information:

Hammond's Cookie Toppings makes payments on its inventory purchases as​ follows: 30% in the month of​ purchase, 65% in the following​ month, and​ 5% in the second month following purchase. Budgeted inventory purchases for​ June, July, and August are​ $16,000, $19,000 and​ $22,000, respectively.

Cash for August:

Purchase for August= 0.30*22,000= 6,600

From July= 0.65*19,000= 12,350

From June= 0.05*16,000= 800

Total= $19,750