Dozier Company has a problem managing cash. From the following data determine cash disbursements for May and June.
April May June Sales 15,000 20,000 22,000
Other Data is as follows:
Purchases of inventory are 60% of sales. Purchase payments are one month after purchase. Selling expenses are 15% of sales. Admin expenses (excluding rent and depreciation) are 20% of sales. Rent Exp. Is $1,200 per month. Equipment depreciation is 5% of sales.
MAY Settlement of Accounts Payable 9,000 (15,000 x 60%) Payment of Selling Expenses 3,000 (20,000 x 15%) Payment of Admin Expenses 4,000 (20,000 x 20%) Payment of Rent Expense 1,2000 (given) No cash disbursement for depreciation
JUNE Settlement of Accounts Payable 12,000 (20,000 x 60%) Payment of Selling Expenses 3,300 (22,000 x 15%) Payment of Admin Expenses 4,400 (22,000 x 20%) Payment of Rent Expense 1,2000 (given) No cash disbursement for depreciation