Question

Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter. The sales forecasts for the next five quarters are as follows: Quarter in Coming Year Following Year First Second Third Fourth First Quarter Sales forecast $372 $360 $336 $384 $384 On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $336. What is the forecast for Paymore’s cash receipts in each quarter of the coming year? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)vv

Answer 1

Cash receipt in each quarter = sales collections - purchase payments

As the information is not given, purchase payments are assumed to made in the same quarter that the purchase order is placed.

The calculations are below :