Problem:
Assume that Calamar Corp. has sales of $7.5 million and accounts payable of $450,000. The corporation utilizes the percent-of-sales method of financial forecasting.
Requirement:
If Calamar is expected to generate sales of $9 million next year, what will the firm's accounts payable be?
- $540,000
- $450,000
- $405,000
- None of these
Note: Please show how you came up with the solution.