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Problem 26-7 Calculating Payments

Rossdale Products has projected the following sales for the coming year:

	Q1			Q2			Q3			Q4
Sales	$	920		$	1,000		$	960		$	1,060

Sales in the year following this one are projected to be 15 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. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b.	Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
c.	Calculate payments to suppliers assuming a 60-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Answer 1

Q1, next Particulars Q1 Q2 Q3 Q4 Sales year 1058 920 1000 960 1060 (920*(100+15)% payment of accounts immediately 300 288 318 317.4 payment of account in 90 days 276 300 288 318 284 296 298 317.8 Payment of account in 60 days (2/3 in current quarter and 1/3 in next quarter) I hope this solves your doubt. Feel free to comment if you still have any query or need something else. I'll help asap. Do give a thumbs up if you find this helpful.

B C D E F G 25 Calculations Q1, next year =920*115% Particulars Q1 Q2 26 Q3 Q4 27 Sales 920 1000 1960 1060 28 29 payment of accounts immediately =+D27*30% =+E27*30% =+F27*30% =+G27*30% 30 31 payment of account in 90 days =+C27*30% =+D27*30% =+E27*30% =+F27*30% 32 33 Payment of account in 60 days =(C27*2/3*30%) +D27*1/3*30%) =(D27*2/3*30%) + E27*1/3*30%) =(E27*2/3*30%)+(F27*1/3*30%) =(F27*2/3*30%) +(G27*1/3*30%) (2/3 in current quarter and 1/3 in 34 next quarter) 25