Question

The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year: 01 02 03 04 Sales $830 $860 $940 $970 a. Accounts receivable at the beginning of the year are $420. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following (A negative answer should be Indicated by a minus sign. Round your answers to 2 decimal places, e.g. 32.16.) Q2 Q3 Q4 $ T Beginning receivables Sales Cash collections Ending receivables Q1 420.00 830.00 860.00 940.00 970.00 b. Recalculate the cash collections with a collection period of 60 days. (A negative answer should be indicated by a minus sign. Round your answers to 2 decimal places, e.g. 32.16.) 01 02 03 04 Beginning $ 420.00 42000 receivables 830.00 860.00 940.00 970.00 Sales Cash collections Ending receivables c. Recalculate the cash collections with a collection period of 30 days. (A negative answer should be indicated by a minus sign. Round your answers to 2 decimal places, e.g. 32.16.) 101 102 103 104 Beginning receivables $ 420.00 Sales 830.00 860.00 940.00 970.00 Cash collections Ending receivables

Answer 1

Ans :

a.

Collection period is 45 days
cash collection of Current quarter sales (Total days in quarter- cash collection period)/total days in quarter	(90-45)90=1/2
Beginning receivable (A)	420	415	430	470
Sales (B)	830	860	940	970
Cash collections ©	835.00	845.00	900.00	955.00
	420+(830*1/2)	415+(860*1/2)	430+(940*1/2)	470+(970*1/2)
Ending receivables (A+B-C)	415.00	430.00	470.00	485.00

b.

Collection period is 60 days
cash collection of Current quarter sales (Total days in quarter- cash collection period)/total days in quarter	(90-60)90=1/3
Beginning receivable (A)	420	553.33	573.33	626.67
Sales (B)	830	860	940	970
Cash collections ©	696.67	840.00	886.67	950.00
	420+(830*1/3)	553.33+(860*1/3)	573.33+(940*1/3)	626.67+(970*1/3)
Ending receivables (A+B-C)	553.33	573.33	626.67	646.67

c .

Collection period is 30 days
cash collection of Current quarter sales (Total days in quarter- cash collection period)/total days in quarter	(90-30)90=2/3
Beginning receivable (A)	420	276.67	286.67	313.33
Sales (B)	830	860	940	970
Cash collections ©	973.33	850.00	913.33	960
	420+(830*2/3)	276.67+(860*2/3)	286.67+(940*2/3)	313.33+(970*2/3)
Ending receivables (A+B-C)	276.67	286.67	313.33	323.33