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General Accounting Discussions: How do I determine cash disbursements with given data

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    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.
    Thankful People: helen
    • CommentAuthorneo
    • CommentTimeFeb 27th 2008
     
    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
    Thankful People: helen

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