King Fisher Aviation purchases from suppliers in a quarter are equal to 65% of t
ID: 2554916 • Letter: K
Question
King Fisher Aviation purchases from suppliers in a quarter are equal to 65% of the next quarter's forecast sales. The payables period is 30 days. Wages, taxes, and other expenses are 25% of sales, and interest and dividends are $68 per quarter. Projected quarterly sales are as follows. Quarter 1 $1,300 Quarter 2 $1,400 Quarter 3 $1,400 Quarter 4 $1,200 Sales for the first quarter of the next year are projected to be $1,500. Calculate the company's cash outlays, by completing the following for each of the four quarters. Payment of accounts Wages, taxes, and other expenses Long-term financing expenses (interest and dividends) Total Fill in the values in the spreadsheet.
Input Area: Purchases (% of sales) 65% Projected sales Q(1) next year $1,500 Expenses (% of sales) 25% Payables period 30 days Interest & dividends per Q $68 Q1 Q2 Q3 Q4 Sales $1,300 $1,400 $1,400 $1,200 Output Area: With a payables period of 30 Q1 Q2 Q3 Q4 Payment of accounts Wages, taxes, other expenses Long-term financing expenses TotalExplanation / Answer
Ans. Calculation of Company's Cash Outlay : Q1 Q2 Q3 Q4 Payment of accounts (W.N.2) $ 910 $ 910 $ 780 $ 975 Wages, taxes, other expenses $ 227.50 $ 227.50 $ 195 $ 243.75 Long term financing expenses $ 68 $ 68 $ 68 $ 68 Total $ 1,205.50 $ 1,205.50 $ 1,043 $ 1,286.75 Working Notes : 1) Q1 Q2 Q3 Q4 Sales $ 1,300 $ 1,400 $ 1,400 $ 1,200 Purchases (65% of Next Quarter sale) $ 910 $ 910 $ 780 $ 975 Wages, taxes, other expenses (25% of sales) $ 227.50 $ 227.50 $ 195.00 $ 243.75 2) Period of payment of accounts payable will be 30 days, which means all purchases from supplier will be paid on the same quarter
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.