It is January 1 of Year 2, Purchases for Yosef Company for Hanuary, February, and March...

It is January 1 of Year 2, Purchases for Yosef Company for Hanuary, February, and March of Year 2 are forecasted to be as follows: January, 200,000

February, 400,000

March, 500,000

20% of purchases are for cash. Of the credit purchases, 30% are paid during the month of the purchases, 50% in the month following the purchase, and 20% in the second month following the purchase. Total purchases for November and December of Year 1 were 200,000 and 400,000 respectively. What is the forecasted amount of the total cash payments for purchases in january of year 27(Note this is the sum of immediate payments from cash purchases, same-month cash payments of credit purchases and cash payments for credit purchases made in prior months).

Expert Solution


	PURCHASES BUDGET

	Particulars	November	December	January	February	March

A	Purchase For the Month	2,00,000	4,00,000	2,00,000	4,00,000	5,00,000
1)	20% Purchase for Cash	40,000	80,000	40,000	80,000	1,00,000

B	Credit Purchase	1,60,000	3,20,000	1,60,000	3,20,000	4,00,000
2)	30% of Credit Puchase paid in Month of payment	48,000	96,000	48,000	96,000	1,20,000
3)	50% of Credit Purchase paid in following month of payment	-	80,000	1,60,000	80,000	1,60,000
4)	20 % of Credit Purchase paid in second month following the purchase	-	-	32,000	64,000	32,000
C	Total Cash Forcasted Payment	88,000	2,56,000	2,80,000	3,20,000	4,12,000

ekkarill92 answered 2 years ago

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