The Bruin Corporation’s purchases from suppliers in a quarter are equal to 80 pe
ID: 2718062 • Letter: T
Question
The Bruin Corporation’s purchases from suppliers in a quarter are equal to 80 percent of the next quarter’s forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 35 percent of sales, and interest and dividends are $126 per quarter. No capital expenditures are planned. Projected quarterly sales are:
Sales for the first quarter of the following year are projected at $1,290
Calculate Bruin’s cash outlays by completing the following
Q1 Q2 Q3 Q4
Payment of Accounts
Wages, taxes, other expenses
Long term financing expenses (interest and dividends)
Total
Q1 Q2 Q3 Q4 Sales $1,170 $1,320 $1,410 $1,620
Sales for the first quarter of the following year are projected at $1,290
Calculate Bruin’s cash outlays by completing the following
Q1 Q2 Q3 Q4
Payment of Accounts
Wages, taxes, other expenses
Long term financing expenses (interest and dividends)
Total
Explanation / Answer
Assumption: The sales and purchases take place evenly through the various months in a quarter
Calculation of Cash Ouflows to Suppliers.
Cash Outlays Quarter wise
Month 1 2 3 4 5 6 7 8 9 10 11 12 Sales 390 390 390 440 440 440 470 470 470 540 540 540 Purchases 80% of Sales of next quarter 352 352 352 376 376 376 432 432 432 344 344 344 Payment to suppliers 352 352 352 376 376 376 432 432 432 344Related Questions
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