Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 24

Estimate Cash Disbursements

Ashland Corporation, a merchandising firm, is preparing its cash budget for October. The following information is available concerning its inventories:

Inventories at beginning of October	$135,000
Estimated purchases for October	660,000
Estimated cost of goods sold for October	675,000
Estimated payments in October for purchases in September	165,000
Estimated payments in October for purchases prior to September	30,000
Estimated payments in October for purchases in October	70%

Required

What are the estimated cash disbursements in October?

Step 1 of 2

Calculation of estimated cash disbursement for October is shown below

Thus, total budgeted cash disbursement for purchases is .