Sedan, Corp., has projected the following sales for the coming year: Sales in th

Question

Sedan, Corp., has projected the following sales for the coming year: Sales in the year following this one are projected to be 10 percent greater in each quarter. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. (Round your answers to 2 decimal places, e.g., 32.16.) Calculate payments to suppliers assuming a 90-day payables period. (Round your answers to 2 decimal places, e.g., 32.16.) Calculate payments to suppliers assuming a 60-day payables period. (Round your answers to 2 decimal places, e.g., 32.16.)

Explanation / Answer

90 days

Particulars Q1 Q2 Q3 Q4 Sales 800 880 840 940 880 Payments 240 264 252 282 264

90 days

Q1 Q2 Q3 Q4 Sales 800 880 840 940 880 Payments 240 264 252 282 60 days Sales of current quarter 800 880 840 940 Sales of next quarter 880 840 940 880 Payments: 2/3*30%*current quarter sales 160 176 168 188 1/3*30%*next quarter sales 88 84 94 88 Total Payment 248 260 262 276

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