Use the Following Information for the Next 5 Questions

question 81

Multiple Choice

Use the following information for the next 5 questions.
Kelita, Inc., projects sales for its first three months of operation as follows: Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purchases are paid for in the month of purchase; the balance is paid in the following month. It is expected that 50% of credit sales will be collected in the month following sale, 30% in the second month following the sale, and the balance the third month. A 5% discount is given if payment is received in the month following sale.
-What are the anticipated cash disbursements for October?

• A) $120,000
• B) $180,000
• C) $140,000
• D) $60,000

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Definitions:

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