Dokken & Dietrich’s Donut Company pays for 25% of its inventory purchases in the
Month of the purchase and the remainder in the following month. The company’s
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 firm’s cash disbursements for November and December.

Dokken & Dietrich’s Donut Company pays for 25% of its inventory purchases in the
month of the purchase and the remainder in the following month. The company’s
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 firm’s 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