Use the Information Below to Answer the Following Question(s)

question 97

Multiple Choice

Use the information below to answer the following question(s) .
Lough Company prepared the following purchases budget:

All purchases are paid for as follows: 20% two months after purchase, 55% in the following month, and 25% in the month of purchase.
-What are the total cash disbursements in October to account for the purchase of merchandise at Lough Company?

• A) $12,275
• B) $37,575
• C) $41,550
• D) $45,495

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Definitions:

Consolidated Income Statement

A comprehensive income statement that combines the financial performance of a parent company and its subsidiaries into a single document.

Impairment Loss

A reduction in the recoverable value of an asset below its carrying amount, requiring the asset's value to be written down.

Effective Tax Rate

The mean rate at which a person or business is charged with taxes, determined by dividing the total amount of taxes paid by the amount of income that is subject to tax.

Cost Method

A method of accounting for investments where the investment is recorded at cost and only dividend income is recognized.