Rivers Company purchases merchandise on account. In general, Rivers pays 50% in the month of purchase and 50% in the following month. All payments in the month of purchase qualify for a 2% cash discount. First quarter budgeted purchases are: January $90,000February $80,000March $96,000A. What are the total cash disbursements expected in February? B. What are the total cash disbursements expected in March? C. Now suppose that there is no cash discount for purchases made in the month of purchase. Now what are the total cash disbursements expected in February? In March?

Cash disbursements are used in the cash budget. It indicates the amount to be collected and paid in…

Answered: Rivers Company purchases merchandise on…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 12EA: Desiccate purchases direct materials each month. Its payment history shows that 70% is paid in the...

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Rivers Company purchases merchandise on account. In general, Rivers pays 50% in the month of purchase and 50% in the following month. All payments in the month of purchase qualify for a 2% cash discount. First quarter budgeted purchases are:

January	$90,000
February	$80,000
March	$96,000

A. What are the total cash disbursements expected in February?

B. What are the total cash disbursements expected in March?

C. Now suppose that there is no cash discount for purchases made in the month of purchase. Now what are the total cash disbursements expected in February? In March?

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