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

Question

Business

Emilia

24 April, 11:24

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

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Answers (1)

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Deanna · Answer 1

The correct answer is $23,053.34.

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