Question

10. The firm has projected next year's quarterly sales at $960, $890, $980, and $1,050 for Quarters 1 to 4, respectively. Accounts receivable at the beginning of the year are $212 and the collection period is 18 days. What is the amount of the accounts receivable balance at the end of Quarter 2? Assume a year has 360 days. Please show your work. A) $212 B) $207 C) $178 D) $184 E) $167

Answer 1

Correct Option is "C"

Since accounts receivables collection period is 18 days. The amount of accounts receivables balance at the end of Quarter 2 will be 18 days sales of Quarter 2 which is $ 178 i.e., ($890/90 days)*18 days. Quarter is of 90 days as question specifies year is of 360 days.