Question

The MacDonald 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 30 percent of sales, and interest and dividends are $115 per quarter. No capital expenditures are planned. Projected quarterly sales are: Sales Q1 $1,530 Q2 $1,680 Q3 $1,740 Q4 $1,980 Sales for the first quarter of the following year are projected at $1,650. Calculate the company's cash outlays by completing the following: (Do not round intermediate calculations and 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

Answer 1

purchase Amount paid 420 420 420 420 435 420 435 420 435 495 435 495 435 495 495 412.5 495 412.5 495 412.5 412.5 January February March April May June July August September October November December 435 Q2 Q4 1402.5 Q1 Amount payable wages,tax and exp. Interest & divident 420 459 115 Q3 1275 504 1151 1365 522 115 594 115 Total 994 1894 2002 2111.5

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