Question

Purchases in May were $65,000​, while expected purchases for June and July are $75,000 and $93,000​, respectively. All purchases are paid ​% in the month of purchase and ​% in the following month. At what amount are June payments for purchases​ budgeted?

Answer 1

$61,000

Explanation:

The computation of June payments for purchases budgeted is shown below:-

June payments for purchases budgeted = Purchase of June × Purchase percentage + May purchase × Percentage of the following month

= $75,000 × 25% + $65,000 × 65%

= $18,750 + $42,250

= $61,000

Therefore for computing the June payments for purchases budgeted we simply applied the above formula.