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Hardy Company reports budgeted merchandise purchases below. For those purchases, 40% of a month's purchases is paid in the month of purchase, and 60% is paid in the first month after purchase. Prepare the schedule of cash payments for merchandise purchases for September and October. Budgeted merchandise purchases August 195,000 Merchandise purchases Cash payments for HARDY COMPANY Schedule of Cash Payments for Merchandise Purchases Current period purchases Prior period purchases Total cash payments for merchandise purchases September 181,000 September $ October 160,000 October 181,000 $ 160,000

Hardy Company reports budgeted merchandise purchases below. For those purchases, 40% of a month's purchases is paid in the month of purchase, and 60% is paid in the first month after purchase. Prepare the schedule of cash payments for merchandise purchases for September and October. Budgeted merchandise purchases August 195,000 Merchandise purchases Cash payments for HARDY COMPANY Schedule of Cash Payments for Merchandise Purchases Current period purchases Prior period purchases Total cash payments for merchandise purchases September 181,000 September $ October 160,000 October 181,000 $ 160,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hardy Company reports budgeted merchandise purchases as follows. For these purchases, 40% of a month’s purchases is paid in the month of purchase, and 60% is paid in the first month after purchase. Prepare the schedule of cash payments for merchandise purchases for September and October. - **Budgeted Merchandise Purchases:** - August: $195,000 - September: $181,000 - October: $160,000 **HARDY COMPANY** **Schedule of Cash Payments for Merchandise Purchases:** | | September | October | |-----------------------|-----------|----------| | Merchandise Purchases | $181,000 | $160,000 | **Cash Payments for:** - **Current Period Purchases:** - Computed as 40% of the current month's purchases. - **Prior Period Purchases:** - Computed as 60% of the previous month's purchases. **Schedule Details:** - **September Payments:** - **Current Period**: 40% of September's purchases: $72,400 - **Prior Period**: 60% of August's purchases: $117,000 - **Total Cash Payments**: $189,400 - **October Payments:** - **Current Period**: 40% of October's purchases: $64,000 - **Prior Period**: 60% of September's purchases: $108,600 - **Total Cash Payments**: $172,600 This schedule assists in managing cash flow by identifying the amounts to be paid for merchandise purchases in each month.
Transcribed Image Text:Hardy Company reports budgeted merchandise purchases as follows. For these purchases, 40% of a month’s purchases is paid in the month of purchase, and 60% is paid in the first month after purchase. Prepare the schedule of cash payments for merchandise purchases for September and October. - **Budgeted Merchandise Purchases:** - August: $195,000 - September: $181,000 - October: $160,000 **HARDY COMPANY** **Schedule of Cash Payments for Merchandise Purchases:** | | September | October | |-----------------------|-----------|----------| | Merchandise Purchases | $181,000 | $160,000 | **Cash Payments for:** - **Current Period Purchases:** - Computed as 40% of the current month's purchases. - **Prior Period Purchases:** - Computed as 60% of the previous month's purchases. **Schedule Details:** - **September Payments:** - **Current Period**: 40% of September's purchases: $72,400 - **Prior Period**: 60% of August's purchases: $117,000 - **Total Cash Payments**: $189,400 - **October Payments:** - **Current Period**: 40% of October's purchases: $64,000 - **Prior Period**: 60% of September's purchases: $108,600 - **Total Cash Payments**: $172,600 This schedule assists in managing cash flow by identifying the amounts to be paid for merchandise purchases in each month.
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