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18 February, 14:24

Pasadena Candle Inc. pays 40% of its purchases on account in the month of the purchase and 60% in the month following the purchase. Purchases are budgeted to be $40,000 for August and $36,000 for September. Prepare a simple cash budget for Pasadena Candle Inc. Pasadena Candle Inc. Schedule of Cash Payments for Purchases For the Mont Ending September Payments for August purchases Payments for September purchases?

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  1. 18 February, 15:06
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    Cash budget for Pasadena Candle Inc.

    Month Purchased Paid

    August $40,000 $16,000

    September $36,000 $38,400

    Calculations:

    Month ending payment in September = 60 % x August purchases + 40 % x September purchases = 0.60 x $ 40,000 + 0.40 x $ 36,000

    = $ 24,000 + $ 14,400 = $ 38,400
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