Calculate the cash disbursements or payments for january

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Reference no: EM132958287

Mercury Company prepared the following information for the next three months:

Month Budgeted Sales

December $320,000

January 460,000

February 412,000

Direct Materials Purchases per Month

December $ 175,000

January 185,000

February 210,000

Direct Labour per Month

January $70,000

February 85,000

Additional Information:

Sales are collected as follows:

75% in the month of sale

25% in the month after sale

Direct materials purchases are paid as follows:

60% in month of purchase

Remainder paid in full the following month

Other Disbursements:

January - Equipment purchase: $10,000

February - Debt repayment: $30,000

Required:

Problem a) Calculate the cash disbursements (payments) for January.

Problem b) Calculate the cash receipts for February.

Reference no: EM132958287

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