The Sepulcro Corporation’s purchases from suppliers in a quarter are equal to 70

Question

The Sepulcro Corporation’s purchases from suppliers in a quarter are equal to 70 percent of the next quarter’s forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 25 percent of sales, and interest and dividends are $117 per quarter. No capital expenditures are planned. Projected quarterly sales are:
  

  
Sales for the first quarter of the following year are projected at $1,710.
  
Calculate the company’s cash outlays by completing the following: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Next Year Q1 Q2 Q3 Q4 Q1 Sales $1,590 $1,740 $1,800 $2,040 $1,710 Payment of accounts 1148 1232 1316 1351 Q1= ((2/3)*.7*1590)+((1/3)*.7*1740)=1148 Q2= ((2/3)*.7*1740)+((1/3)*.7*1800)=213 Q3= ((2/3)*.7*1800)+((1/3)*.7*2040)=207 Q4= ((2/3)*.7*2040)+((1/3)*.7*1710)=228 Wages, taxes, other expenses 397.5 435 450 510 Long-term financing expenses (interest and dividends) $117 $117 $117 $117 Total $1,662.50 $1,784.00 $1,883.00 $1,978.00

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