The Cookie Shops purchases are equal to 67 percent of the fo

The Cookie Shop\'s purchases are equal to 67 percent of the following month\'s sales. The accounts payable period for purchases is 30 days while all other expenditures are paid in the month they are incurred. Assume each month has 30 days. The company has compiled the following information.

What are the company\'s total cash disbursements for May?

$8,963

$9,233

$8,695

$8,494

$8,434

Solution

Cash for May:

Cash paid for purchases

67% of 8900 = $5963 (being 67% of next month’s Sales)

Other Expenses $2500

Interest and Taxes $500

Cash disbursements for May = $8963