Question

Lambert Company purchased $140,000 of goods in September and expects to purchase $130,000 of goods in October. Lambert typically pays for 20% of purchases in the month of purchase and 80% in the following month. ​ In mid-October, Lambert expects to buy a new computer for $4,500 using the company credit card. Typically, the credit card bill is paid in full in the following month. September credit card purchases totaled $6,000. What are the total cash disbursements expected by Lambert during the month of October?

Answer 1

Answer:

Cash disbursements for October will be $144000

Explanation:

The cash disbursements for October will include 80% amount of September purchases and 20% amount of October purchases along with the payment for September's credit card bill.

The cash disbursements are,

80% of September's purchases = 0.8 * 140000 = $112000

20% of October's purchases = 0.2 * 130000 = $26000

Credit card bill for September = 6000

Cash Disbursements - October = 112000 + 26000 + 6000 = $144000