The Torrey Pine Corporation\'s purchases from suppliers in a quarter are equal t

Question

The Torrey Pine Corporation's purchases from suppliers in a quarter are equal to 75 percent of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 15 percent of sales, and interest and dividends are $95 per quarter. No capital expenditures are planned Projected quarterly sales are shown here Q2 Sales $1,920 $2,220 $1,920 $1,620 Q1 Q3 Q4 Sales for the first quarter of the following year are projected at $2,250. Calculate the company's cash outlays by completing the following (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) Q1 Q2 Q3 Q4 Payment of accounts Wages, taxes, other expenses Long-term financing expenses (interest and dividends) Total

Explanation / Answer

Q1 Q2 Q3 Q4 Payments of accounts 1515 1590 1365 1372.5 Wages, taxes, other expenses 288 333 288 243 Long-term financing expenses 95 95 95 95 (interest and dividends) 1898.00 2018.00 1748.00 1710.50 *Calculation: Payments of accounts : Q1 = (2/3 * 1920 * 75%) + (1/3 * 2220 * 75%)     960 + 555 = 1515 Q2 = (2/3 * 2220 * 75%) + (1/3 * 1920 * 75%)   1110 + 480 = 1590 Q3 = (2/3 * 1920 * 75%) + (1/3 * 1620 * 75%)     960 + 405 = 1365 Q4 = (2/3 * 1620 * 75%) + (1/3 * 2250 * 75%)     810 + 562.5 = 1372.5 *Since the payables period is 60 days, payables in each period = 60 / 90 = 2 / 3 of last quarter's orders, and 1 / 3 of this quarter's orders 2 / 3 (75% of times current sales) + 1 / 3 (75% of next period sales)

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