What would be the cash disbursements for month 3? Description Month 1 Month 2 Month 3 Month 4 Material Purchases $ 175,000.00 $ 185,000.00 $ 215,000.00 $ 190,000.00 Amount paid in month of purchase65.00% Amount paid in month after purchase30.00% Amount paid two months after purchase5.00% Discounts in month of purchase3.50% Discount in month after purchase1.00% Total Cash disbursements in month 3 Show your work below Description Month 1 Month 2 Month 3

Cash budget is a process of estimating cash receipt and payment for the upcoming period. This helps in estimating the cash availability for the future period. The process helps the management in making timely decisions.Compuation of effective cash receipt percentage after related discountAmount disbursed inBefore DiscountDiscountAfter DiscountMonth 165%2.275%62.725%(65 x 3.5%)Month 230%0.30%29.7%( 30 x 1%)Month 35%05%The cash disbursement schedule can be preapred as follows:ParticularsAmount Disbursed inMonth 1Month 2Month 3Purchases of month 1175,000109,769 (175,000 x 62.725%)51,975 (175,000 x 29.7%)8,750 (175,000 x 5%)Purchases of month 2185,000116,041.3 (185,000 x 62.725%)54,945 (185000 x 29.7%)Purchases of month 3215,000134,859 (215000 x 62.725%)Total disbursements109,76916,8016.3198,554Therefore, amount expected to be disbursed in month 3 is $198,554

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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What would be the cash disbursements for month 3?

Description	Month 1	Month 2	Month 3	Month 4
Material Purchases	$ 175,000.00	$ 185,000.00	$ 215,000.00	$ 190,000.00

Amount paid in month of purchase	65.00%
Amount paid in month after purchase	30.00%
Amount paid two months after purchase	5.00%
Discounts in month of purchase	3.50%
Discount in month after purchase	1.00%

Total Cash disbursements in month 3

Show your work below
Description	Month 1	Month 2	Month 3