Birds Unlimited has an accounts payable period of 60 days.The firm has expected sales of $17,800,$22,100,$24,400 and $28,800,respectively,by quarter for the next calendar year.The purchases for a quarter are equal to 65 percent of the following quarter's sales.What is the amount of the projected cash disbursements for accounts payable for Quarter 3? Assume a 360-day year.

Question

Quizplus · Accepted Answer

The purchases for Quarter 2 are 65% of Quarter 3 sales, which is 65% of $28,800 = $18,720. Since the accounts payable period is 60 days, these purchases will be paid in Quarter 3.

Birds Unlimited Has an Accounts Payable Period of 60 Days