43. Purchases: Oct $125,000, Nov $250,000, Dec $30,000. Payment pattern: 50 % month of purchase, 35 % next, 15 % second. What are forecasted October cash payments?
Answer: B
October cash payments are forecasted to be $62,500.
To calculate the forecasted cash payments for October, we need to consider the payment pattern based on the purchases made in October. According to the payment pattern, 50% of the purchases made in October are paid in the same month.
A) $18,750
This option represents 15% of the October purchases, which is not relevant for the cash payments in October since it only accounts for a portion of the total amount that will be paid later. Therefore, this amount is incorrect.
B) $62,500
This option correctly reflects 50% of the October purchases of $125,000. Calculating this gives us $125,000 * 0.50 = $62,500, which aligns with the payment pattern for the month of purchase.
C) $78,750
This option does not accurately represent any portion of the payments according to the established pattern. It could mistakenly combine different percentages or months but ultimately does not correspond to the cash payments due in October. Thus, this option is incorrect.
D) $152,500
This option exceeds the total amount of purchases made in October. It appears to misinterpret the payment structure, as it does not follow the specified percentages for cash payments due. Therefore, this amount is also incorrect.
Conclusion
The correct forecasted cash payments for October are $62,500, which is derived from 50% of the October purchases. All other options fail to align with the specified payment pattern, either by miscalculating the percentages or by misinterpreting the timing of payments. Option B stands out as the only correct answer based on the calculations provided.