Exercise 13-37 (Algo) Estimate Purchases and Cash Disbursements (LO 13-3, 4) Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 34,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February 33,250 March 27,250 April 28,750 May 34,300 June 30,900 July 42,860 Parts are purchased at a wholesale price of $49. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 39,500 parts in January. Required: Estimate purchases of the component (in units) for February and March. Estimate the cash disbursements for the component in February and March.
Exercise 13-37 (Algo) Estimate Purchases and Cash Disbursements (LO 13-3, 4) Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 34,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February 33,250 March 27,250 April 28,750 May 34,300 June 30,900 July 42,860 Parts are purchased at a wholesale price of $49. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 39,500 parts in January. Required: Estimate purchases of the component (in units) for February and March. Estimate the cash disbursements for the component in February and March.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please Do not Give solution in image format otherwise will do downvote
Transcribed Image Text:Exercise 13-37 (Algo) Estimate Purchases and Cash Disbursements (LO 13-3, 4) Montrose Instrumentation
produces measurement equipment. One component, used in a variety of the company's products, is critical
and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the
component to produce three month's worth of sales (one component is used in each unit of product in
which it is used). On February 1, the company has 34,000 components in stock. Sales of the units in which
the component is used in each of the next six months are estimated to be as follows: February 33,250
March 27,250 April 28,750 May 34,300 June 30,900 July 42,860 Parts are purchased at a wholesale price of
$49. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in
the month when the components are delivered and 60 percent in the following month. Montrose
purchased 39,500 parts in January. Required: Estimate purchases of the component (in units) for February
and March. Estimate the cash disbursements for the component in February and March.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education