10.4 Cash payments

Karamazov Brothers Inc. has projected the following sales for the coming year(s):

	Actual	Projected
	Q4, 20x1	Q1, 20x2	Q2, 20x2	Q3, 20x2	Q4, 20x2	Q5, 20x3
Total sales	$900	$900	$980	$940	$1,040	$990

a. Calculate payments to suppliers if Karamazov places orders during each quarter equal to 30% of projected sales for the next quarter. Assume that Karamazov pays immediately.

b. Calculate payments to suppliers assuming a 90-day payables period.

c. Calculate payment to suppliers assuming a 60-day payables period.