Question

Exercise 20-19 Budgeted cash payments LO P2 Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: April, $80,000; May, $110,000; and June, $120,000. Payments are made as follows: 70% in the month of purchase and 30% in the month after purchase. The March 31 balance of accounts payable is $22,000. Prepare a schedule of budgeted cash payments for April, May, and June.

Answer 1

See explanation section.

Step-by-step explanation:

P2 Zisk Co.

Budgeted cash payments

For the 2nd quarter

April May June

Accounts payable $22,000

70% in the month of purchase $56,000 $77,000 $84,000

30% in the month after purchase $24,000 $33,000

Budgeted cash payments $78,000 $101,000 $117,000

Total budgeted cash for the 2nd quarter = $296,000.

30% in the month after purchase means 30% amount will be given in the following month.