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Financial & Managerial Accounting
Found in: Page 916
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Garda purchased $600,000 of merchandise in August and expects to purchase $720,000 in September. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month. Compute cash payments for merchandise for September.

The total cash payments for merchandise for the month of September will be $630,000.

See the step by step solution

Step by Step Solution

Given the information as

Merchandise purchased in August $600,000

Merchandise purchased in September $720,000

Payment made in 25% and 75% of the purchase and following month

Computation of cash payments

Garda

Cash payments for merchandise

For the month of September

Particulars

Amount

Cash payments for September purchases

$180,000

Add: Cash payments for August purchases

$450,000

Total cash payments

$630,000

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