Question

The Litzenberger Company has projected the following quarterly sales amounts for the coming year:

	Q1			Q2			Q3			Q4
Sales	$	690		$	720		$	800		$	870

a.

Accounts receivable at the beginning of the year are $270. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. A negative answer should be indicated by a minus sign.)

	Q1		Q2		Q3		Q4
Beginning receivables	$		$		$		$
Sales	690.00		720.00		800.00		870.00
Cash collections
Ending receivables	$		$		$		$

b.	Recalculate the cash collections with a collection period of 60 days. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. A negative answer should be indicated by a minus sign.)

	Q1		Q2		Q3		Q4
Beginning receivables	$		$		$		$
Sales	690.00		720.00		800.00		870.00
Cash collections
Ending receivables	$		$		$		$

c.	Recalculate the cash collections with a collection period of 30 days. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. A negative answer should be indicated by a minus sign.)

	Q1		Q2		Q3		Q4
Beginning receivables	$		$		$		$
Sales	690.00		720.00		800.00		870.00
Cash collections
Ending receivables	$		$		$		$

Answer 1

A	45Days (It means cash will be collected opening receivable plus half of current quarter)
		Q1		Q2		Q3		Q4
	Beginning receivables	$270.00		$345.00		$360.00		$400.00
	Sales	$690.00		$720.00		$800.00		$870.00
	Cash collections	$615.00		$705.00		$760.00		$835.00
	Ending receivables	$345.00		$360.00		$400.00		$435.00
B	60 Days (It means cash will be collected opening receivable plus 1/3rd of current quarter)
		Q1		Q2		Q3		Q4
	Beginning receivables	$270.00		$460.00		$480.00		$533.33
	Sales	$690.00		$720.00		$800.00		$870.00
	Cash collections	$500.00		$700.00		$746.67		$823.33
	Ending receivables	$460.00		$480.00		$533.33		$580.00
C	30 Days (It means cash will be collected opening receivable plus 2/3rd of current quarter)
		Q1		Q2		Q3		Q4
	Beginning receivables	$270.00		$230.00		$240.00		$266.67
	Sales	$690.00		$720.00		$800.00		$870.00
	Cash collections	$730.00		$710.00		$773.33		$846.67
	Ending receivables	$230.00		$240.00		$266.67		$290.00

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