Merrell Enterprises had the following purchases budgeted for the last six months of 2009:
$\begin{array}{lr}
\text { July } & \$ 100000 \
\text { August } & 80000 \
\text { September } & 90000 \
\text { October } & 70000 \
\text { November } & 90000 \
\text { December } & 100000
\end{array}$
Merrell pays one-half of a month's purchases in the month of purchase and the remainder in the following month.What are expected total cash disbursements for the last quarter of 2009?
A) $210 000
B) $255 000
C) $130 000
D) $260 000

Question

Merrell Enterprises had the following purchases budgeted for the last six months of 2009:
$\begin{array}{lr}
\text { July } & \$ 100000 \
\text { August } & 80000 \
\text { September } & 90000 \
\text { October } & 70000 \
\text { November } & 90000 \
\text { December } & 100000
\end{array}$ 
Merrell pays one-half of a month's purchases in the month of purchase and the remainder in the following month.What are expected total cash disbursements for the last quarter of 2009?
A) $210 000
B) $255 000
C) $130 000
D) $260 000

Quizplus · Accepted Answer

For the last quarter (October, November, December), the cash disbursements include half of each month's purchases plus the remaining half of the previous month's purchases. October: $70,000/2 = $35,000 (half of October) + $90,000/2 = $45,000 (remaining half of September) = $80,000. November: $90,000/2 = $45,000 (half of November) + $70,000/2 = $35,000 (remaining half of October) = $80,000. December: $100,000/2 = $50,000 (half of December) + $90,000/2 = $45,000 (remaining half of November) = $95,000. Total disbursements = $80,000 + $80,000 + $95,000 = $255,000.

Merrell Enterprises Had the Following Purchases Budgeted for the Last