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    Gidget126's Avatar
    Gidget126 Posts: 1, Reputation: 1
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    #1

    Mar 19, 2007, 08:56 AM
    Cash disbursement
    Dokken & Dietrichís Donut Company pays for 25% of its inventory purchases in the
    Month of the purchase and the remainder in the following month. The companyís
    Inventory purchases totaled $840,000 in October, $920,000 in November, and $600,000
    In December. The company also paid 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 firmís cash disbursements for November and December.
    bunnyKutty's Avatar
    bunnyKutty Posts: 60, Reputation: 5
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    #2

    Mar 23, 2007, 03:45 AM
    Quote Originally Posted by Gidget126
    Dokken & Dietrichís Donut Company pays for 25% of its inventory purchases in the
    month of the purchase and the remainder in the following month. The companyís
    inventory purchases totaled $840,000 in October, $920,000 in November, and $600,000
    in December. The company also paid 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 firmís cash disbursements for November and December.
    Cash Disbursement for the months of November and December
    Particulars November December
    Cash purchases(25% of purchases) 230,000 150,000
    Cash payment for credit purchases
    (75% of previous month's purchases) 630,000 690,000
    Pyment for new equipment 380,000
    Paid for taxes 130,000
    Salaries and wages 300,000 275,000
    Toptal cash payments 1,540,000 1,245,000

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