Question

Birds Unlimited has an accounts payable period of 60 days. The firm has expected sales of $17,800, $22,100, $24,400 and $28,800, respectively, by quarter for the next calendar year. The purchases for a quarter are equal to 65 percent of the following quarter's sales. What is the amount of the projected cash disbursements for accounts payable for Quarter 3

Answer 1

The correct answer is $23,053.34.

Step-by-step explanation:

According to the scenario, the computation of the given data are as follows:

Time period = 60 Days

Purchase = 65 %

So, we can calculate the cash disbursement by using following formula:

Cash disbursement = [( 60 ÷ 90) × (.65 × $24,400 ) ] + [( 60 ÷ 90) × (.65 × $28,800 )]

= $10,573.34 + $12,480

= $23,053.34