Dorian Inc. has the following sales: Q1) $1,900 Q2) $2,400 Q3) $2,600 Q4) $2,400

Question

Dorian Inc. has the following sales: Q1) $1,900 Q2) $2,400 Q3) $2,600 Q4) $2,400

Purchases are equal to 50% of the following quarter's sales. The sales for the first quarter of the following year are estimated at $2,100. The accounts receivable period is 30 days and the accounts payable period is 45 days.

Assume there are 30 days in each month.

The firm will purchase _____________ of goods in quarter two and pay its suppliers ___________ durinig quarter four.

Please show your work.

a) $1,080; $1,125

b) $1,300; $1,125

c) $1,300; $1,080

d) $1,170; $1,013

Explanation / Answer

Solution.

Calculation of Account payble and purchase.

The firm will purchase $1,300 of goods in quarter two and pay its suppliers $1,125 durinig quarter four.

Therefore answer is :-

b) $1,300; $1,125

Particular's C Quarter 2 Quarter 3 Quarter 4 Quarter 1 Next year Sales $1900 $2400 $2600 $2400 $2100 Purchase 50% of following Quarter $1200 $1300 $1200 $1050 payment to suplier on 45 Day's 600+650=1250 650+600=1250 600+525=1125

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