Question

Target purchases from suppliers in a quarter are equal to 61 percent of the next quarter's forecasted sales. The payables period is 60 days. Wages, taxes, and other expenses are 18 percent of sales, and interest and dividends are $72 per quarter. No capital expenditures are planned. The projected sales for Year 1 are $730, $770, $710, and $850 for Quarters 1 to 4, respectively. Sales for the first quarter of Year 2 are projected at $760. What is the amount of the total disbursements for Quarter 3 of Year 1

Answer 1

$661.37

Step-by-step explanation:

Particulars Amount

- Payment to payable in Quarter 3 $461.57

($710*61%*60/90 days) + ($850*61%*30/90 days)

- Payment of Wages, taxes & other expenses $127.80

of Quarter 3 ($710*18%)

- Payment of interest and dividends of Quarter 3 $72.00

The amount of the total disbursements for Quarter 3 of Year 1 $661.37