Dakota Williams is one of Texas’s premiere party planners. She purchases a varie

Question

Dakota Williams is one of Texas’s premiere party planners. She purchases a variety of supplies, such as plastic tableware, stemware, and decorations, throughout the year. Dakota has prepared the following purchases budget for the coming year.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted purchases

$300,000 $420,000 $435,000 $515,000

Historically, Dakota has paid for 40% of her purchases in the quarter of purchase and 60% in the quarter following purchase. On December 31 of this year Dakota had a $250,000 accounts payable balance.

Required Prepare Dakota’s cash payments budget for the coming year.

Explanation / Answer

Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Purchases $       3,00,000 $       4,20,000 $      4,35,000 $      5,15,000 Payment for Purchase of: Beginning Accounts Payable $       2,50,000 $   2,50,000 1st Quarter $       1,20,000 $       1,80,000 $   3,00,000 2nd Quarter $       1,68,000 $      2,52,000 $   4,20,000 3rd Quarter $      1,74,000 $      2,61,000 $   4,35,000 4th Quarter $      2,06,000 $   2,06,000 Total $       3,70,000 $       3,48,000 $      4,26,000 $      4,67,000 $ 16,11,000

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