Augustino's has the following estimated sales. Purchases are equal to 64 percent of the following quarter's sales.The accounts receivable period is 45 days and the accounts payable period is 60 days.Assume there are 30 days in each month.How much will the firm pay its suppliers in the third quarter?

Question

Augustino's has the following estimated sales.  Purchases are equal to 64 percent of the following quarter's sales.The accounts receivable period is 45 days and the accounts payable period is 60 days.Assume there are 30 days in each month.How much will the firm pay its suppliers in the third quarter?

Quizplus · Accepted Answer

Q₃ payments = 60/90(0.64 × $12,400) + 30/90(0.64 × $14,600) = $8,405

Augustino's Has the Following Estimated Sales