3. ABC Co. had the following purchases on account: July August September $1,070,000 $980,000 $800,000 65% of the month's purchases are paid in the month of purchase. The remainder is paid in the month following purchase. How much will the cash payments for purchases be in August?

3. ABC Co. had the following purchases on account: July August September $1,070,000 $980,000 $800,000 65% of the month's purchases are paid in the month of purchase. The remainder is paid in the month following purchase. How much will the cash payments for purchases be in August?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

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