Dozier Company has a problem managing cash. From the following data determine the cash disbursements for the month of May. Sales: April, $16000; May $20,000; June $23,000. Other data are as follows: Purchases of inventory are 60% of sales. Payments of purchases of inventory are made one month after purchase. Selling expenses are 15% of sales and are paid in the same month as the associated sales. Administrative expenses (excluding rent and depreciation) are 20% of sales and are paid in the same month as the associated sales. Rent expenses is $1,200 per month and is paid each month. Equipment depreciation is 5% of sales.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Dozier Company has a problem managing cash. From the following data determine the cash
disbursements for the month of May. Sales: April, $16000; May $20,000; June $23,000. Other data are
as follows: Purchases of inventory are 60% of sales. Payments of purchases of inventory are made one
month after purchase. Selling expenses are 15% of sales and are paid in the same month as the
associated sales. Administrative expenses (excluding rent and depreciation) are 20% of sales and are
paid in the same month as the associated sales. Rent expenses is $1,200 per month and is paid each
month. Equipment depreciation is 5% of sales.
Transcribed Image Text:Dozier Company has a problem managing cash. From the following data determine the cash disbursements for the month of May. Sales: April, $16000; May $20,000; June $23,000. Other data are as follows: Purchases of inventory are 60% of sales. Payments of purchases of inventory are made one month after purchase. Selling expenses are 15% of sales and are paid in the same month as the associated sales. Administrative expenses (excluding rent and depreciation) are 20% of sales and are paid in the same month as the associated sales. Rent expenses is $1,200 per month and is paid each month. Equipment depreciation is 5% of sales.
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