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pastoria enterprises has scheduled raw material purchases of $100,000 in january, $130,000 in february, and $150,000 in march. the company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. calculate the expected cash disbursements for the month of february.

Respuesta :

Total amount disbursed is thus 25,000 + 97,500 = $122,500

How did this happen?

In the above-mentioned case :

The question asks to calculate how much will be disbursed by the company in February.

Firstly , we know that the company disburses 75% in the month of purchase and 25% during the month after purchase.

Now, 75% of $130,000 would be disbursed as February’s own payment:

Mathematically 75/100 * 130,000 = 97,500

Also, we should not forget that the company disburses 25% of previous month during the current. That is 25/100 * 100,000 = 25,000

Total amount disbursed is thus 25,000 + 97,500 = $122,500

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