The Thakor Corporation\'s purchases from suppliers in a quarter are equal to 75

Question

The Thakor 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 23 percent of sales, and interest and dividends are $60 per quarter. No capital expenditures are planned. Here are the projected quarterly sales: Sales Q1 Q2 Q3 Q4 $620 $760 $740 $660 Sales for the first quarter of the following year are projected at $810. Required: Calculate the company's cash outlays by completing the following (Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16)): Q1 Q2 Q3 Q4 Payment of accounts $ $ $ $ Wages, taxes, and other expenses Long-term financing expenses (interest and dividends) Total

Explanation / Answer

Hi, Cash Outlays Q1 Payment of Accounts (.75*760) = 570 Wages and Taxes .23*620 = 142.6 Dividend = 60 Total Outlay = 570 + 142.6 + 60 = 772.6 or 773 Q2 Payment of Accounts (.75*740) = 555 Wages and Taxes .23*760 = 174.8 Dividend = 60 Total Outlay = 555 + 174.8 + 60 = 789.8 or 790 Q3 Payment of Accounts (.75*660) = 495 Wages and Taxes .23*740 = 170.2 Dividend = 60 Total Outlay = 495 + 170.2 + 60 = 725.2 Q4 Payment of Accounts (.75*810) = 607.5 Wages and Taxes .23*660 = 151.8 Dividend = 60 Total Outlay = 607.5 + 151.8 + 60 = 819.3 Thanks, Aman

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