ALPHA, Inc. sells all of its products on credit. Purchases are 60% of the sales for the
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ALPHA, Inc. sells all of its products on credit. Purchases are 60% of the sales for the following quarter. The firm uses a 365-day year and account averages where applicable in its computations.
| Accounts receivable period | 37 days |
| inventory period | 51 days |
| accounts payable period | 42 days |
| Account | quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 |
| Sales | $7000 | $6000 | $8000 | $9000 |
| Wages | $2000 | $1500 | $2000 | $2500 |
| Overhead expenses | $500 | $400 | $500 | $600 |
| Dividents | 125 | 125 | 125 | 125 |
| Interest expense | 350 | 150 | 200 | 300 |
a) What is the net cash flow for Quarter 2?
A. -$4
B. $174
C. $289
D. $303
E. $359
b) What is the accounts payable balance at the beginning of Quarter 2?
A. $1,420
B. $1,680
C. $1,920
D. $2,240
E. $2,560
c) What is the amount of purchases in Quarter 2?
A. $3,600
B. $4,000
C. $4,800
D. $5,400
E. $6,000
d)
What is the amount of the total disbursements for Quarter 3?
A. $7,625
B. $7,875
C. $7,945
D. $8,225
E. $8,475
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