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This is the amount of purchases made during April. The question asks for cash disbursements made during April, not the amount of purchases.
Brandon had cash disbursements in April related to the following items: 30% of February purchases of $160,000 $48,000 30% of March purchases of $160,000 48,000 40% of April purchases of $140,000 56,000 Payroll: 10% of April sales of $300,000 30,000 Operating expenses: 20% of May sales of $260,000 52,000 Interest payment 20,000 Total $254,000 Total cash disbursements were $254,000 in April.
This answer could result from including 10% of April's purchases for payroll disbursements instead of 10% of April sales, and 10% of May's purchases for operating expense disbursements instead of 20% of May's sales.
This answer includes only the cash payments for the items purchased for resale. See the correct answer for a complete explanation.