FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A company plans to purchase inventory for the second half of 2014 as
follows:
July
$100,000
August
$75,000
September $225,000
October $125,000
November $250,000
December $30,000
They usually pay 50% of inventory purchases in the month of purchase, 35%
in the following month, and 15% in the second month.
Based on the information, what are the forecasted December cash payments?
a. $15,000
b. $18,750
c. $87,500
d. $121,250
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Transcribed Image Text:A company plans to purchase inventory for the second half of 2014 as follows: July $100,000 August $75,000 September $225,000 October $125,000 November $250,000 December $30,000 They usually pay 50% of inventory purchases in the month of purchase, 35% in the following month, and 15% in the second month. Based on the information, what are the forecasted December cash payments? a. $15,000 b. $18,750 c. $87,500 d. $121,250
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