Company A pays for 25% of its inventory purchases in the month of purchase and the remainder in the following month. The company's inventory purchases totaled 840,000 in October, 920,000 in Novemeber an 600,000 in December. The company also pid for new equipment with a total cost of 380,000 in November and made a tax payment of 130,000 in December. Salaries and wages were 300,000 in November and 275,000 in December.

Determine the firm's cash disbursements for November and December.
:eek:

Why don't you try this yourself first. This problem is not that difficult. For your purchase in October you have a cash disbursement of 25% of the purchase in October. In November you will have a cash disbursement of the remaining 75% of the October purchase. Just work the problem one step at a time.

After you work it, we can check your numbers for you.

November December
1,540,000 1,245,000