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20 March, 09:27

Cash Budget Pasadena Candle Inc. pays 40% of its purchases on account in the month of the purchase and 60% in the month following the purchase. If purchases are budgeted to be $40,000 for August and $36,000 for September. Prepare a simple cash budget for Pasadena Candle Inc. Pasadena Candle Inc. Schedule of Cash Payments for Purchases For the Month Ending September $ Total payments for purchases on account $

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  1. 20 March, 10:31
    0
    Th e cash payments in the month of September is $38,400

    Explanation:

    August September

    Cash payment $16,000 $14,400

    balance of August purchases $24,000

    September total payments $38,400

    In August 40% of $40,000 would be paid since $40,000 was the worth of the purchases in August i, e $40000*40%=$16,000

    In September the remaining 60% of $40,000 is due for payment i. e $40,000*60%=$24,000

    In September 40% of the month purchases is due for payment, that is $36,000*40%=$14,400

    The balance of 60% of $36,000 would be paid in October.
  2. 20 March, 11:16
    0
    Total payments for purchases on account $38,400

    Explanation:

    September Payments for Purchases include

    40% of September Sales 60% of August Sales

    Schedule of Cash Payments for Purchases For the Month Ending September

    September Sales ($36,000*40%) = $14,400

    August Sales ($40,000*60%) = $24,000

    Total = $38,400
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