Dynamic Futon forecasts the following purchases from suppliers:     Jan. Feb. Mar. Apr. May Jun. Value of goods ($ millions) 37 33 30 27 25 25     a. Sixty percent of goods are supplied cash-on-delivery. The remainder are paid with an average delay of 1 month. If Dynamic Futon starts the year with payables of $27 million, what is the forecasted level of payables for each month? (Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 1 decimal place.) Jan. Feb. Mar. Apr. May Jun. Payables           b. Suppose that, from the start of the year, the company stretches payables by paying 50% after 1 month and 20% after 2 months. (The remainder continue to be paid cash-on-delivery.) Recalculate payables for each month assuming that there are no cash penalties for late payment. Assume that Dynamic Futon  didn't have any payable balance at the start of the year. (Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 1 decimal place.)   Jan. Feb. Mar. Apr. May Jun. Payables

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Dynamic Futon forecasts the following purchases from suppliers:

 

  Jan. Feb. Mar. Apr. May Jun.
Value of goods ($ millions) 37 33 30 27 25 25
 

 

a. Sixty percent of goods are supplied cash-on-delivery. The remainder are paid with an average delay of 1 month. If Dynamic Futon starts the year with payables of $27 million, what is the forecasted level of payables for each month? (Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 1 decimal place.)

Jan. Feb. Mar. Apr. May Jun.
Payables

 

 

 

 

 

b. Suppose that, from the start of the year, the company stretches payables by paying 50% after 1 month and 20% after 2 months. (The remainder continue to be paid cash-on-delivery.) Recalculate payables for each month assuming that there are no cash penalties for late payment. Assume that Dynamic Futon  didn't have any payable balance at the start of the year. (Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 1 decimal place.)

 

Jan. Feb. Mar. Apr. May Jun.
Payables
 

 

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