Question

In: Finance

Wright Inc. has forecasted the following quarterly sales amounts for the upcoming year: Q1 = $746;...

Wright Inc. has forecasted the following quarterly sales amounts for the upcoming year:

Q1 = $746; Q2 = $686; Q3 = $907; Q4 = $808

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 first quarter?

Solutions

Expert Solution

Particulars Q1 Q2 Q3 Q4 Q5
Sales             746            686            907            808            933
Less: Purchases @ 70% of Next Quarter             480            635            566            653
Less: Wages, Taxes, Other Expense @ 17%             127            117            154            137
Less: Interest & Dividend               62               62               62               62
EBT               77           -128            125             -44
Cash Disbursement
Particulars Amount
1. Payment to Creditors (480/3 Months) $ 160 is due by end of Q1             160
2. Wages Taxes and other expenses are due in the same month and have to be paid accordingly             127
3. Interst and Divided               62
Total Cash Disbursement             349

Related Solutions

Wright Inc. has forecasted the following quarterly sales amounts for the upcoming year: Q1 = $748;...
Wright Inc. has forecasted the following quarterly sales amounts for the upcoming year: Q1 = $748; Q2 = $678; Q3 = $899; 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...
The Jallouk Company has projected the following quarterly sales amounts for the coming year:     Q1...
The Jallouk Company has projected the following quarterly sales amounts for the coming year:     Q1 Q2 Q3 Q4 Sales $450 $510 $570 $720    a. Accounts receivable at the beginning of the year are $240. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)     Q1 Q2 Q3 Q4 Beginning receivables $...
The Jallouk Company has projected the following quarterly sales amounts for the coming year:     Q1...
The Jallouk Company has projected the following quarterly sales amounts for the coming year:     Q1 Q2 Q3 Q4 Sales $450 $510 $570 $720    a. Accounts receivable at the beginning of the year are $240. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)     Q1 Q2 Q3 Q4 Beginning receivables $...
The Litzenberger Company has projected the following quarterly sales amounts for the coming year: Q1 Q2...
The Litzenberger Company has projected the following quarterly sales amounts for the coming year: Q1 Q2 Q3 Q4 Sales $ 790 $ 820 $ 900 $ 980 a. Accounts receivable at the beginning of the year are $380. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. A negative answer should be indicated by...
The Geller Company has projected the following quarterly sales amounts for the coming year: Q1 Q2...
The Geller Company has projected the following quarterly sales amounts for the coming year: Q1 Q2 Q3 Q4   Sales $420 $480 $540 $690 a. Accounts receivable at the beginning of the year are $270. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)     b. Accounts receivable at the beginning of the year...
The Doak Company has projected the following quarterly sales amounts for the coming year: Q1 Q2...
The Doak Company has projected the following quarterly sales amounts for the coming year: Q1 Q2 Q3 Q4 Sales $3,900 $4,700 $4,300 $3,600 Accounts receivable at the beginning of the year are $1,700. a. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) b. The company has a 60-day collection period. Calculate cash...
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:...
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:   Q1   Q2   Q3   Q4   Sales $ 750 $ 780 $ 860 $ 940 a. Accounts receivable at the beginning of the year are $340. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.): Q1 Q2...
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:...
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:   Q1   Q2   Q3   Q4   Sales $ 710 $ 740 $ 820 $ 900 a. Accounts receivable at the beginning of the year are $290. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.): Q1 Q2...
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:...
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:   Q1   Q2   Q3   Q4   Sales $ 750 $ 780 $ 860 $ 940 a. Accounts receivable at the beginning of the year are $340. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.): Q1 Q2...
King Fisher Aviation has projected the following quarterly sales amounts for the coming year: Quarter 1...
King Fisher Aviation has projected the following quarterly sales amounts for the coming year: Quarter 1 $750 Quarter 2 $820 Quarter 3 $790 Quarter 4 $950 Accounts Receivable at the beginning of the year are $350. King Fisher has a 30 day collection period. Calculate the cash collections in each of the four quarters by completing the following for each quarter. Beginning receivables Sales Cash Collections Ending Receivables Rework the Ending Receivables calculation using 45 and 60 days. This is...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT