Workout Together Has Projected the Following Sales for the Coming

question 51

Multiple Choice

Workout Together has projected the following sales for the coming year: Sales in the year following this one are projected to be 18 percent greater in each quarter. Assume the firm places orders during each quarter equal to 29 percent of projected sales for the next quarter. How much will the firm pay to its suppliers in Quarter 2 if its accounts payable period is 60 days?

• A)$212.67
• B)$224.33
• C)$241.67
• D)$251.33
• E)$256.67

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Definitions:

Net Float

Net float is the difference between the amount of checks written by a company and the amount that has been cleared and charged to the company's account, affecting its available balance.

Collection

The process of obtaining payment on outstanding accounts or the grouping of specific items, as in art or stamps.

Disbursements Float

The time difference between when a payment is made by a firm and when the funds are actually withdrawn from the firm's bank account.

Preauthorized Payments

Automated payments set up to charge a bank account or credit card for recurring bills or subscriptions on a pre-set schedule.