Mcdraw-Hill Connect DBLOCK 1 HOMEWORK 0.00 points The MacFarfane Company has pro
ID: 2398023 • Letter: M
Question
Mcdraw-Hill Connect DBLOCK 1 HOMEWORK 0.00 points The MacFarfane Company has proijected the following quarierly sales amounts for the coming year T9O $9,800 $090 $7.,590 Accounts neceivable at the beginning of the year are $3,690. The company has a 45-day round your answers to the nearest whole number,.g.32 collection period. Caloulate cash collections i n each of the four quarters by completing t 7,890 9.090 Cash oolections Ending recelvabes eceivable at the beginning of the year are $3,690. The company has a 60-day collection period Caloulate cash collections in each of the four round your answer, to the nearest whole number, e 32) B90 c. Accourts neceivable at the beginning of the year are $3,80. The comoany has a 30-day colection period Caloulane cash colections in each of the tour ouartens by cempleting the foll round your answers to the nearest whole number e.g.. 32 3 6Explanation / Answer
Note:
a. With a 45-day collection period, one-half of the quarter's sales will be collected during the quarter since a quarter has 90 days while the balance one-half will be in ending receivables collected in the next quarter.
Q1 Cash collections: $3690 + ($7890/2) = $7635
Q1 Ending receivables: $7890/2 = $3945
Similarly calculated for other quarters.
b. With a 60-day collection period, one-third of the quarter's sales will be collected during the quarter while two-thirds will be in ending receivables collected in the next quarter.
Q1 Cash collections: $3690 + ($7890/3) = $6320
Q1 Ending receivables: $7890 x 2/3 = $5260
Similarly calculated for other quarters.
c. With a 30-day collection period, two-third of the quarter's sales will be collected during the quarter while one-thirds will be in ending receivables collected in the next quarter.
Q1 Cash collections: $3690 + ($7890 x 2/3) = $8950
Q1 Ending receivables: $7890 x 1/3 = $2630
Similarly calculated for other quarters.
Ending receivables of Q1 will be beginning receivables of Q2 and so forth.
a. 45-day collection period Q1 Q2 Q3 Q4 Beginning receivables 3690 3945 4845 4545 Sales 7890 9690 9090 7590 Cash collections 7635 8790 9390 8340 Ending receivables 3945 4845 4545 3795 b. 60-day collection period Q1 Q2 Q3 Q4 Beginning receivables 3690 5260 6460 6060 Sales 7890 9690 9090 7590 Cash collections 6320 8490 9490 8590 Ending receivables 5260 6460 6060 5060 c. 30-day collection period Q1 Q2 Q3 Q4 Beginning receivables 3690 2630 3230 3030 Sales 7890 9690 9090 7590 Cash collections 8950 9090 9290 8090 Ending receivables 2630 3230 3030 2530