16. Your firm is trying to determine its cash disbursements for the next two months (June and July). In any month, the firm makes purchases of 60% of that month’s sales, which are paid the following month. In addition, the firm incurs the following costs every month and pays for them in the month the expenses are incurred: wages and salaries of $10,000, rent of $4,000, and miscellaneous cash expenses of $1,000. Depreciation amortized on a monthly basis is $2,000. June’s sales are expected to be $100,000, and July’s sales are expected to be $150,000. Cash disbursements for the month of July are expected to be:

To determine the cash disbursements for the month of July, we need to consider several factors:

1. Purchases: The firm makes purchases of 60% of that month's sales, paid the following month. Since June's sales are expected to be $100,000, the purchases for July would be 60% of $100,000, which is $60,000.

2. Monthly Expenses: The firm incurs several costs every month and pays for them in the same month. These expenses include wages and salaries of $10,000, rent of $4,000, miscellaneous cash expenses of $1,000, and monthly depreciation of $2,000. Therefore, the total monthly expenses are $10,000 + $4,000 + $1,000 + $2,000 = $17,000.

Now let's calculate the cash disbursements for July:

Purchases for July: $60,000
Monthly Expenses: $17,000

Adding these two amounts, the total cash disbursements for the month of July would be:

$60,000 + $17,000 = $77,000

Therefore, the cash disbursements for the month of July are expected to be $77,000.