Gilbert Company purchased $40,000 of goods in July and expects to purchase $60,000 of goods in August. Gilbert typically pays for 25% of purchases in the month of purchase and 75% in the following month. What are Gilbert Company's total expected cash disbursements for purchases in the month of August?

Gilbert Company's total expected cash disbursements for purchases in the month of August are $45,000.

Explanation:

In August the 75% of July purchases payments and 25 % of August purchases Payments will bedisbursed.

Cash Disbursement of August

August Payment = $15,000

July Payment = $30,000

Total Disbursement = $15,000 + $30,000

Total Disbursement = $45,000

Working:

July payment = $40,000 x 75% = $30,000

August Payment = $60,000 x 25% = $15,000

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