Problem
The information below will be used for both question
Osgiliath Company is trying to budget the November 2016 cash payments for accounts payable. Management believes that, of a given month's purchases, 40% are paid in month of purchase, and a 2% discount is given of what is paid in that month. The remaining 60% are paid in the following month. Expected unit purchases for October and November are 91,200 and 68,300 units, respectively. The cost per unit is $3.80.
1. What are Osgiliath's cash disbursement requirements for November?
a. $101,740
b. $309,676
c. $103,816
d. $311,752
2. What is the accounts payable total at the end of November?
a. $207,936
b. $155,724
c. $103,816
d. $101,740