Connect Access Card For Fundamental Accounting Principles
Connect Access Card For Fundamental Accounting Principles
24th Edition
ISBN: 9781260158526
Author: John J Wild
Publisher: McGraw-Hill Education
Question
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Chapter 22, Problem 26QS
To determine

Concept Introduction:

Cash payments for merchandise:

The cash payments for merchandise are the cash payments made to the creditors of the business from whom the merchandise inventory has been purchased. The payment made to the creditors are based on the policies of the company. The company may decide to pay a portion of due in the month of purchase and a portion in the next month.

To compute:

Cash payments for September

Expert Solution & Answer
Check Mark

Answer to Problem 26QS

Solution:

Cash payments for September = $ 630,000

    Cash payments for Merchandise (Budgeted)
    For the Month Ended September 30
    Cash payments for August purchases
    $ 450,000
    Cash payments for September purchases
    $ 180,000
    Cash payments for Merchandise for September$ 630,000

Explanation of Solution

The cash payments for September are calculated as under −

Cashpaymentsfor Merchandise for September = Cash Payments for August Purchases + Cash Payments for September purchases

The cash payments for August purchases and September purchases are calculated as under −

Cash payments for August Purchases −

Given,

  • August purchases = $ 600,000
  • Percentage of Merchandise purchases to be paid in September = 75 % ( 75 % to be paid in the following month)
  • Cash payments for August Purchases = August purchases X Percentage of total to be paidCash payments for August Purchases = $ 600,000 X 75%Cash payments for August Purchases = $ 450,000

Cash payments for August Purchases = $ 450,000.

Cash payments for September Purchases −

Given,

  • September purchases = $ 720,000
  • Percentage of Merchandise purchases to be paid in September = 25 % ( 25 % to be paid in the month of purchase)
  • Cash payments for September Purchases = September purchases X Percentage of total to be paidCash payments for September  Purchases = $ 720,000 X 25%Cash payments for September  Purchases = $ 180,000

Cash payments for September Purchases = $ 180,000.

Now, the cash payments for September is calculated as −

Cashpaymentsfor Merchandise for September = Cash Payments for August Purchases + Cash Payments for September purchases

Given,

  • Cash payments for August Purchases = $ 450,000
  • Cash payments for September Purchases = $ 180,000
  • Cashpaymentsfor Merchandise for September =$ 450,000+ $ 180,000Cashpaymentsfor Merchandise for September =$ 630,00

Conclusion

Thus, the cash payments for the month of September = $ 630,000.

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Chapter 22 Solutions

Connect Access Card For Fundamental Accounting Principles

Ch. 22 - Prob. 11DQCh. 22 - Prob. 12DQCh. 22 - Prob. 13DQCh. 22 - Prob. 14DQCh. 22 - Prob. 15DQCh. 22 - Prob. 16DQCh. 22 - Budget motivation C1 For each of the following...Ch. 22 - Prob. 2QSCh. 22 - Prob. 3QSCh. 22 - Prob. 4QSCh. 22 - Prob. 5QSCh. 22 - Prob. 6QSCh. 22 - Prob. 7QSCh. 22 - Prob. 8QSCh. 22 - Prob. 9QSCh. 22 - Prob. 10QSCh. 22 - Prob. 11QSCh. 22 - Prob. 12QSCh. 22 - Prob. 13QSCh. 22 - Prob. 14QSCh. 22 - Prob. 15QSCh. 22 - Prob. 16QSCh. 22 - Prob. 17QSCh. 22 - Prob. 18QSCh. 22 - Prob. 19QSCh. 22 - QS 22-20 Cash receipts, with uncollectible...Ch. 22 - Cash receipts, with uncollectible accounts P2...Ch. 22 - Prob. 22QSCh. 22 - Prob. 23QSCh. 22 - Prob. 24QSCh. 22 - Prob. 25QSCh. 22 - Prob. 26QSCh. 22 - Prob. 27QSCh. 22 - Prob. 28QSCh. 22 - Prob. 29QSCh. 22 - Prob. 30QSCh. 22 - Prob. 31QSCh. 22 - Prob. 1ECh. 22 - Prob. 2ECh. 22 - Prob. 3ECh. 22 - Prob. 4ECh. 22 - Prob. 5ECh. 22 - Prob. 6ECh. 22 - Prob. 7ECh. 22 - Prob. 8ECh. 22 - Prob. 9ECh. 22 - Prob. 10ECh. 22 - Prob. 11ECh. 22 - Prob. 12ECh. 22 - Prob. 13ECh. 22 - Prob. 14ECh. 22 - Prob. 15ECh. 22 - Prob. 16ECh. 22 - Prob. 17ECh. 22 - Exercise 22-18 Budgeted cash receipts P2 Jasper...Ch. 22 - Prob. 19ECh. 22 - Prob. 20ECh. 22 - Prob. 21ECh. 22 - Prob. 22ECh. 22 - Exercise 22-23 Manufacturing: Cash...Ch. 22 - Prob. 24ECh. 22 - Prob. 25ECh. 22 - Prob. 26ECh. 22 - Prob. 27ECh. 22 - Prob. 28ECh. 22 - Prob. 29ECh. 22 - Prob. 30ECh. 22 - Prob. 31ECh. 22 - Exercise 22-32A Merchandising: Cash...Ch. 22 - Exercise 22-33A Merchandising: Budgeted balance...Ch. 22 - Prob. 34ECh. 22 - Prob. 35ECh. 22 - Prob. 1APSACh. 22 - Prob. 2APSACh. 22 - Prob. 3APSACh. 22 - Problem 22-4A Manufacturing: Preparation of a...Ch. 22 - Prob. 5APSACh. 22 - Problem 22-6AA Merchandising: Preparation of...Ch. 22 - Prob. 7APSACh. 22 - Prob. 8APSACh. 22 - Prob. 1BPSBCh. 22 - Prob. 2BPSBCh. 22 - Prob. 3BPSBCh. 22 - Problem 22-4B Manufacturing: Preparation of a...Ch. 22 - Prob. 5BPSBCh. 22 - Prob. 6BPSBCh. 22 - Prob. 7BPSBCh. 22 - Prob. 8BPSBCh. 22 - Prob. 22SPCh. 22 - Prob. 1AACh. 22 - Prob. 2AACh. 22 - Prob. 3AACh. 22 - Both the budget process and budgets themselves can...Ch. 22 - BTN 22-4 The sales budget is usually the first and...Ch. 22 - Certified Management Accountants must understand...Ch. 22 - Prob. 4BTNCh. 22 - Prob. 5BTNCh. 22 - To help understand the factors impacting a sales...
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