Question

In: Accounting

P Company pays for purchases of materials in full in the month following the purchase

P Company pays for purchases of materials in full in the month following the purchase. During the previous month, IP had purchases of $25,000. During the current month, IP had purchases of $30,000.

The amount that IP will pay during the current month for purchases is ______

Solutions

Expert Solution

IP company pays for purchases of materials in full in the month following the purchase. It means payment for material purchase is to be made in the next month of purchase. For example, material purchased in the month of January will be paid next month i.e. February.

During the previous month, IP had purchases of $25,000. Thus, it will be paid in the current month

The amount that IP will pay during the current month for purchases is $25,000.

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