Sedman, Corp., has projected the following sales for the coming year: Q1 Q2 Q3 Q
ID: 2792296 • Letter: S
Question
Sedman, Corp., has projected the following sales for the coming year:
Q1 Q2 Q3 Q4
Sales $ 800 $ 880 $ 840 $ 940
Sales in the year following this one are projected to be 10 percent greater in each quarter.
a.
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.)
Q1 Q2 Q3 Q4
Payment of accounts $ $ $ $
b.
Calculate payments to suppliers assuming a 90-day payables period. (Round your answers to 2 decimal places, e.g., 32.16.)
Q1 Q2 Q3 Q4
Payment of accounts $ $ $ $
c.
Calculate payments to suppliers assuming a 60-day payables period. (Round your answers to 2 decimal places, e.g., 32.16.)
Q1 Q2 Q3 Q4
Payment of accounts $ $ $ $
Explanation / Answer
Current Year Next year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales During last year 800 880 840 940 Projected sales for next year 880 968 924 1034 800 880 840 940 880 968 924 1034 (a) Payment to suppliers - Since credit period is 0 payment = 0.3 x Next qtr sales 264 252 282 264 (b) Payment to suppliers - Since credit period is 90 days payment = 0.3 x current qtr sales 240 264 252 282 ( c) Payment to suppliers - Order (0.3 x Next qtr sales) 264 252 282 264 290.4 277.2 310.2 0 Since credit period is 60 days; payment = 1/3 x 0.3 x Next qtr sales + 2/3 x 0.3 x Current qtr sales 1/3 of next qtr order 84 94 88 96.8 2/3 of this qtr order 176 168 188 176 260 262 276 272.8 Please provide feedback… Thanks in Advance :-)