Question

The Torrey Pine Corporation’s purchases from suppliers in a quarter are equal to 65 percent of the next quarter’s forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 25 percent of sales, and interest and dividends are $95 per quarter. No capital expenditures are planned.

Projected quarterly sales are shown here:

	Q1			Q2			Q3			Q4
Sales	$	2,370		$	2,670		$	2,370		$	2,070

Sales for the first quarter of the following year are projected at $2,700. 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	592.50	667.50	592.50	517.50
Long-term financing expenses (interest and dividends)	95.00	95.00	95.00	95.00
Total

Answer 1

	Q1	Q2	Q3	Q4
	Calculation	Answer	Calculation	Answer	Calculation	Answer	Calculation	Answer
Payments of accounts	(1540.50*60/90) + (1735.50*30/90)	1605.50	(1735.50*60/90) + (1540.50*30/90)	1670.50	(1540.50*60/90) + (1345.50*30/90)	1475.50	(1345.50*60/90) + (1755.00*30/90)	1482.00
Wages, taxes, other expenses [ 25% of sales	592.50		667.50		592.50		517.50
Long-term financing expense (interest and dividends)	95.00		95.00		95.00		95.00
		2293.00		2433.00		2163.00		2094.50

Working note :
	Last year's Q4	Q1	Q2	Q3	Q4	Following year's Q1
Forecasted Sales		2370	2670	2370	2070	2700
Purchases [ 65% of the next quarter’s forecast sales ]	1540.50	1735.50	1540.50	1345.50	1755.00