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Acme Co . has projected the following sales for 2 0 2 2 : Q 1 = $ 8 7 0 Q 2 = $
Acme Co has projected the following sales for :
Q $
Q $
Q $
Q $
Sales for each quarter in are projected to be percent greater than the previous quarter ie Q is projected to be higher than Q
Calculate expected payments to suppliers in each quarter for assuming:
Acme places orders during each quarter equal to percent of projected sales for the next quarter. For example, if Q sales are expected to be $ then purchases in Q of would be estimated to be $ x $
Acme's average days of payables is days.
Q payments Blank Fill in the blank, read surrounding text.
Q payments Blank Fill in the blank, read surrounding text.
Q payments Blank Fill in the blank, read surrounding text.
Q payments Blank Fill in the blank, read surrounding text.
HINT: This problem is very similar to the examples regarding cash receipts from sales and receivables only this problem looks at cash disbursements involving purchases and payables. Recall that the average days of payables payables period tells us how long, on average, it takes for a company to pay for its purchases. So if the average days payable is then the company pays for its purchases immediately. If the payables period is then the company tends to take about days to pay for its purchases. This would imply that anything purchased in the first months of a quarter would be paid for in the same quarter within days of the purchase but anything purchased in the last month of the quarter wouldn't be paid for until the first month of the next quarter.
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