7. Assume we’re at the end of “this year” planning “next year’s” financial statements.

Calculate the following using indirect planning assumptions as indicated.

a. Sales are forecast to be $58,400,000. Management wants to plan for a 45-day ACP next year. What ending receivables balance should be planned for next year?

b. What ending inventory should be planned if revenue is expected to be

$457,000 and the cost ratio is 53% (cost of goods sold as a percentage of revenue)

and management wants to forecast an inventory turnover of 5
.

c. Normal credit terms from suppliers request payment within 30 days. In an effort to conserve cash, management has decided to pay in 50 days. Nearly all payables come from purchases of inventory. Materials make up 60% of the Cost of Goods Sold. Next year’s revenue is forecast to be $378 million. The firm’s cost ratio is expected to be 56%. What figure should be included in next year’s ending balance sheet for Accounts Payable?