Help on osbrone online question Cash Managment

Purchases are calculated as 45% of the next month’s forecast sales and are paid two months after the date of purchase.
For example, purchases in July are based on the estimated sales for August and paid for in September.

why do i do 45% of September to get October purchases it makes no sense :mad2:


  • MarieNoelle
    MarieNoelle Moderator, MAAT, AAT Licensed Accountant Posts: 1,369
    Hi topcat,
    Your cash payment for October is for purchases you made 2 months before ie in August.
    August purchases are calculated as 45% of September forecasted sales
    So your cash payment in october is 76,100 x 45%=34245.

    Does it make sense now?
  • topcat
    topcat Registered Posts: 452
    Hi MarieNoelle,

    Thank you very much that makes sense now.:thumbup1:

    The wording was driving me around the bend
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