How Much Should This Company Expect in Accounts Payable at the End of the 2nd Quarter?

What is the expected pattern for this company's payment of inventory purchases?

Based on the historical data, what percentage of inventory purchases are paid on account and when are the payments made?

Expected Payment Pattern:

The company's payment pattern for inventory purchases has historically been 100% on account. The payments are made as follows: 11% in the month of purchase and the remainder one month following the purchase.

The company's payment pattern for inventory purchases plays a crucial role in determining the Accounts Payable at the end of the 2nd quarter. By understanding the percentage of purchases paid on account and the timing of the payments, the company can accurately forecast their financial obligations.

With this payment pattern in mind, the company can estimate the amount of Accounts Payable that will be outstanding at the end of the 2nd quarter. By analyzing the total inventory purchases for March, April, May, and June, and applying the payment pattern, the company can calculate the expected Accounts Payable amount.

In this case, the company should expect an Accounts Payable of approximately $1,170 at the end of the 2nd quarter. By subtracting the total payment amount made in the 2nd quarter from the Accounts Payable on April 1, the company can arrive at this estimated figure.