Calculate payments to suppliers assuming that the company places orders during e
ID: 2709684 • Letter: C
Question
Calculate payments to suppliers assuming that the company places orders during each quarter equal to 20 percent of projected sales for the next quarter. Assume that the company pays immediately.
What is the payables period in this case?
What are the payments to suppliers each quarter? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16)):
Calculate payments to suppliers assuming that the company places orders during each quarter equal to 20 percent of projected sales for the next quarter. Assume a 90-day payables period. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Calculate payments to suppliers assuming that the company places orders during each quarter equal to 20 percent of projected sales for the next quarter. Assume a 60-day payables period. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Grohl Products has projected the following sales for the coming year:Explanation / Answer
1.:The payables period is zero since the company pays immediately.
The payment in each period is 20 percent of next period’s sales, so: Quarterly payments = (0.20)(next period sales).
The payable day is zero
Sale in 5th quarter
$ 540.00
Q1
Q2
Q3
Q4
Payment of accounts
108.00
138.00
126.00
108.00
2:Since the payables period is 90 days, the payment in each period is 20 percent of the current period sales, so:Quarterly payments = (0.20)(current sales).
Q1
Q2
Q3
Q4
Payment of accounts
90.00
108.00
138.00
126.00
3:Since the payables period is 60 days, the payment in each period is 2/3 of last quarter’s orders, plus 1/3 of this quarter’s orders, or:Quarterly payments = 2/3(0.20) (current sales) + 1/3(0.20) (next period sales).
Sale in 5th quarter
$ 540.00
Q1
Q2
Q3
Q4
Payment of accounts
96.00
118.00
134.00
120.00
Sale in 5th quarter
$ 540.00
Q1
Q2
Q3
Q4
Payment of accounts
108.00
138.00
126.00
108.00
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