Pasadena Candle Inc. pays 40% of its purchases on account in the month of the purchase and 60% in the month following the purchase. If purchases are budgeted to be $40,000 for August and $36,000 for September, what are the budgeted cash payments for purchases on account for September?

The budgeted cash payment for September = $37600

Explanation:

Below is the calculation for budgeted cash payments:

The payment for the month August = 40% of 40000 = $16000

The payment for the month September = 60% of 36000 = $21600

In order to find the budgeted cash payment for September, just add the payment for august and September.

The budgeted cash payment = 16000 + 21600

The budgeted cash payment for september = $37600

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