Swifty corporation expects to purchase $9 of materials in july and $11 of materials in august. three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. how much will august's cash disbursements for materials purchases be?

a. $105000
b. $11
c. $67500
d. $82500

option (A) $105,000

Explanation:

Data provided in the question:

Expected purchase of material in July = $90,000

Expected purchase of material in August = $110,000

Amount paid in the month of purchase =

Amount paid in the following month =

Now,

August's cash disbursements for materials purchases will be

= Three fourth of the amount of material purchased in August and one fourth of the amount of material purchased in July

[as August is the following month for July]

= × $110,000 +   × $90,000

= 82,500 + 22,500

= $105,000

Hence,

the answer is option (A) $105,000

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return