Question

The following selected data pertain to Flagship Corporation: Cash operating expenses July 1-31$180,000 Depreciation 60,000 Merchandise purchases in July 560,000 Estimated payments in July for June purchases 220,000 Estimated payments in July for purchases prior to June 50,000 Estimated payments in July for purchases in July 40% July's cash disbursements are expected to be: Multiple Choice $734,000. None of the answers is correct. $674,000. $464,000. $404,000.

Answer 1

Answer:

Total cash disbursement in July= $674,000

Explanation:

First, we must determine the cash disbursements from July purchases and expenses:

Cash disbursements from July:

Cash operating expenses July= 180,000

Merchandise purchases in July= 560,000*0.4= 224,000

Total cash from July= $404,000

Depreciation is not a cash disbursement cost.

Now, from June and before:

Estimated payments in July for June purchases 220,000

Estimated payments in July for purchases before June 50,000

Total cash disbursement in July= 404,000 + 220,000 + 50,000

Total cash disbursement in July= $674,000