Question

Wright Inc. has forecasted the following quarterly sales amounts for the upcoming year: Q1 = $769; Q2 = $677; Q3 = $880; Q4 = $789 Wright’s purchases from suppliers in a quarter are equal to 70% of the next quarter's forecasted sales. The payables period is 60 days. Wages, taxes, and other expenses are 17% of sales, and interest and dividends are $62 per quarter. No capital expenditures are planned. Sales in Q1 of the following year are expected to be 933. What are Wright’s cash disbursements in the fourth quarter?

Answer 1

Statement showing payment to trade payables

Particulatrs	Q1	Q2	Q3	Q4
Sales	769	677	880	789
Purchases(70% of next quarter)	473.9	616	552.3	653.1
Payment -1/3 in same month	157.97	205.33	184.10	217.70
2/3 in next month		315.93	410.67	368.20
Total payment	157.97	521.27	594.77	585.90

Statement showing cash disbursement

Particulatrs	Q1	Q2	Q3	Q4
Sales	769	677	880	789
Total payment to trade payable	157.97	521.27	594.77	585.90
Wages, taxes, and other expenses	130.73	115.09	149.60	134.13
interest and dividends	62.00	62.00	62.00	62.00
Cash disburement( b+c+d)	350.70	698.36	806.37	782.03