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King Fisher Aviation purchases from suppliers in a quarter are equal to 65% of the next...

King Fisher Aviation purchases from suppliers in a quarter are equal to 65% of the next quarter's forecast sales. The payables period is 30 days. Wages, taxes, and other expenses are 25% of sales, and interest and dividends are $68 per quarter.

Projected quarterly sales are as follows.

Quarter 1 $1,300

Quarter 2 $1,400

Quarter 3 $1,400

Quarter 4 $1,200

Sales for the first quarter of the next year are projected to be $1,500. Calculate the company's cash outlays, by completing the following for each of the four quarters.

Payment of accounts

Wages, taxes, and other expenses

Long-term financing expenses (interest and dividends)

Total

What do you recommend to King Fisher regarding changing their 30 day collection period? Explain your reasoning.

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Answer #1

Answer: It is given that the payable period is 30 days. It means that 2/3rd of every quarters purchases will be paid in resp

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