Grohl Products has projected the following sales for the coming year: Sales in t
ID: 2736684 • Letter: G
Question
Grohl Products has projected the following sales for the coming year: Sales in the year following this one are projected to be 20 percent greater in each quarter. Requirement 1: Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. What is the payables period in this case? Payables period What are the payments to suppliers each quarter? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16)): Requirement 2: Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume a 90-day payables period. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Requirement 3: Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume a 60-day payables period. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)Explanation / Answer
Ans) a)The payables period is zero since the company pays immediately.
b)Sales in the year following this one are projected to be 20% greater in each quarter. Therefore, Q1 sales for the next year will be $690 (1.20) = $828. The payment in each period is 30 percent of next period‘s sales, so: Q1 Q2 Q3 Q4 Payment of accounts $243, $279 $270 $248.4 b
Requirement 2)90 day payable period
The payments on account each quarter
Q1 Q2 Q3 Q4 Payment of accounts is $207, $243 $279 $270 b
Requirement 3)60 day payable period
The payments on account each quarter
Q1 Q2 Q3 Q4 Payment of accounts is $138, $162 $186 $180 b
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