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Exercise 20-19 Budgeted cash payments LO P2 Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: April, $80,000; May, $110,000; and June, $120,000. Payments are made as follows: 70% in the month of purchase and 30% in the month after purchase. The March 31 balance of accounts payable is $22,000. Prepare a schedule of budgeted cash payments for April, May, and June.

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Answer:

See explanation section.

Explanation:

                                                    P2 Zisk Co.

                                      Budgeted cash payments

                                            For the 2nd quarter

                                                            April                   May                  June

Accounts payable                           $22,000

70% in the month of purchase       $56,000           $77,000            $84,000

30% in the month after purchase                            $24,000            $33,000

Budgeted cash payments              $78,000            $101,000           $117,000

Total budgeted cash for the 2nd quarter = $296,000.

30% in the month after purchase means 30% amount will be given in the following month.

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