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 43,000 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 March 35,500 29,500 April May June July 31,000 36,550 33,150 45,110 Parts are purchased at a wholesale price of $58. 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 44,000 parts in January. Required: a. Estimate purchases of the component (in units) for February and March. b. Estimate the cash disbursements for the component in February and March.
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 43,000 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 March 35,500 29,500 April May June July 31,000 36,550 33,150 45,110 Parts are purchased at a wholesale price of $58. 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 44,000 parts in January. Required: a. Estimate purchases of the component (in units) for February and March. b. 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
![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
43,000 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
March
35,500
29,500
April
May
June
July
31,000
36,550
33,150
45,110
Parts are purchased at a wholesale price of $58. 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 44,000
parts in January.
Required:
a. Estimate purchases of the component (in units) for February and March.
b. Estimate the cash disbursements for the component in February and March.
Complete this question by entering your answers in the tabs below.
Required A Required B
Estimate purchases of the component (in units) for February and March.
Merchandise to be purchased in units
February
March
Check r](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F06c7c8d5-2c04-49b7-8fe3-106e5cab0a5d%2F3fdf5d18-cfec-4a7a-8b23-0e4e71e85ced%2Fcbww9td_processed.png&w=3840&q=75)
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
43,000 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
March
35,500
29,500
April
May
June
July
31,000
36,550
33,150
45,110
Parts are purchased at a wholesale price of $58. 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 44,000
parts in January.
Required:
a. Estimate purchases of the component (in units) for February and March.
b. Estimate the cash disbursements for the component in February and March.
Complete this question by entering your answers in the tabs below.
Required A Required B
Estimate purchases of the component (in units) for February and March.
Merchandise to be purchased in units
February
March
Check r
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education