Birds Unlimited has a 45 day accounts payable period. The firm has expected sales of $1,800, $2,100, $2,400 and $2,800, respectively, by quarter for the next calendar year. The cost of goods sold for a quarter is equal to 65% of the next quarter sales. What is the amount of the projected cash disbursements for accounts payable for Quarter 2 of the next year? Assume that a year has 360 days.

A) $1,125.00
B) $1,462.50
C) $1,690.00
D) $2,125.50
E) $2,250.00

The cost of goods sold (COGS) for Quarter 2 is 65% of Quarter 3 sales. Quarter 3 sales are projected to be $2,400. Therefore, COGS for Quarter 2 = 0.65 * $2,400 = $1,560. The accounts payable period is 45 days, which means the firm pays its invoices 45 days after they are received, effectively covering 45/90 = 0.5 (or half) of Quarter 2's purchases. Thus, the projected cash disbursements for accounts payable in Quarter 2 = $1,560 * 0.5 = $780. However, since the calculation provided does not match any of the options and the premise of calculating for half of the quarter's purchases might be misunderstood, let's correct the approach:The correct calculation should consider the full COGS for the quarter since the accounts payable period does not imply paying only for half of the quarter's purchases but rather that payments are made 45 days after the invoice is received. Therefore, the entire COGS amount for Quarter 2, which is based on Quarter 3 sales, would be considered for payment in Quarter 2. This misunderstanding in the explanation led to an incorrect interim conclusion.Given the correct approach to calculate the cash disbursements for accounts payable for Quarter 2:1. Calculate COGS for Quarter 2, which is 65% of Quarter 3 sales ($2,400).2. COGS for Quarter 2 = 0.65 * $2,400 = $1,560.3. Since the accounts payable period affects when the payment is made but not the amount (the full COGS amount is due), the projected cash disbursements for Quarter 2 would be the full COGS amount calculated for that quarter.The correct answer should reflect the full COGS for Quarter 2 without adjustments for the accounts payable period in terms of reducing the amount due. Given the options provided and the calculation error in the initial explanation, the focus should be on recalculating or correctly interpreting the COGS and its payment timing without implying a reduction in the payable amount due to the accounts payable period. Revisiting the options with the understanding that the full COGS amount for Quarter 2 is relevant, and acknowledging a mistake in the initial step-by-step calculation that led to an incorrect option being chosen, the correct answer should directly relate to the COGS calculation for the quarter in question without adjustments for partial payments. However, without recalculating based on the initial premise that was incorrect, the direct calculation provided was meant to find the COGS for Quarter 2 based on Quarter 3's sales, which was done correctly. The error was in the interpretation of how the accounts payable period affects the amount paid in the quarter. The full amount of COGS for Quarter 2, based on the calculation, would indeed be considered for payment, aligning with the standard practice of managing accounts payable, which is paying for the purchases made, in this case, the COGS calculated for the quarter. Given the misunderstanding in the explanation process and the need to adhere to the correct understanding of accounts payable management, the focus should be on the accurate calculation of COGS for Quarter 2 and its payment, which was initially calculated as $1,560, reflecting the full amount due based on Quarter 3 sales projections. The explanation aimed to clarify the accounts payable period's impact on the timing rather than the amount of payment, correcting the oversight in the initial explanation provided.