The Morning Jolt Coffee Company has projected the following quarterly sales amou
ID: 2764715 • Letter: T
Question
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:
Accounts receivable at the beginning of the year are $320. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.):
Recalculate the cash collections with a collection period of 60 days. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.)
Recalculate the cash collections with a collection period of 30 days. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.)
Q1 Q2 Q3 Q4 Sales $ 730 $ 760 $ 840 $ 920Explanation / Answer
Solution :
a.45-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320
365
380
420
Sales
730
760
840
920
Cash collections
-685
-745
-800
-880
collection =Begining receivable+(current quarter sales*45/90)
320+(730*45/90)
365+(760*45/90)
380+(840*45/90)
420+(920*45/90)
Ending receivables
365
380
420
460
b.60-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320.00
486.67
506.67
560.00
Sales
730.00
760.00
840.00
920.00
Cash collections
- 563.33
- 740.00
- 786.67
- 866.67
collection =Begining receivable+(current quarter sales*30/90)
320+(730*30/90)
486.67+(760*30/90)
506.67+(840*30/90)
560+(920*30/90)
Ending receivables
486.67
506.67
560.00
613.33
c.30-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320.00
243.33
253.33
280.00
Sales
730.00
760.00
840.00
920.00
Cash collections
- 806.67
- 750.00
- 813.33
- 893.33
collection =Begining receivable+(current quarter sales*60/90)
320+(730*60/90)
243.33+(760*60/90)
253.33+(840*60/90)
280+(920*60/90)
Ending receivables
243.33
253.33
280.00
306.67
Solution :
a.45-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320
365
380
420
Sales
730
760
840
920
Cash collections
-685
-745
-800
-880
collection =Begining receivable+(current quarter sales*45/90)
320+(730*45/90)
365+(760*45/90)
380+(840*45/90)
420+(920*45/90)
Ending receivables
365
380
420
460
b.60-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320.00
486.67
506.67
560.00
Sales
730.00
760.00
840.00
920.00
Cash collections
- 563.33
- 740.00
- 786.67
- 866.67
collection =Begining receivable+(current quarter sales*30/90)
320+(730*30/90)
486.67+(760*30/90)
506.67+(840*30/90)
560+(920*30/90)
Ending receivables
486.67
506.67
560.00
613.33
c.30-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320.00
243.33
253.33
280.00
Sales
730.00
760.00
840.00
920.00
Cash collections
- 806.67
- 750.00
- 813.33
- 893.33
collection =Begining receivable+(current quarter sales*60/90)
320+(730*60/90)
243.33+(760*60/90)
253.33+(840*60/90)
280+(920*60/90)
Ending receivables
243.33
253.33
280.00
306.67
a.45-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320
365
380
420
Sales
730
760
840
920
Cash collections
-685
-745
-800
-880
collection =Begining receivable+(current quarter sales*45/90)
320+(730*45/90)
365+(760*45/90)
380+(840*45/90)
420+(920*45/90)
Ending receivables
365
380
420
460
b.60-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320.00
486.67
506.67
560.00
Sales
730.00
760.00
840.00
920.00
Cash collections
- 563.33
- 740.00
- 786.67
- 866.67
collection =Begining receivable+(current quarter sales*30/90)
320+(730*30/90)
486.67+(760*30/90)
506.67+(840*30/90)
560+(920*30/90)
Ending receivables
486.67
506.67
560.00
613.33
c.30-day collection period.
Q1
Q2
Q3
Q4
Beginning receivables
320.00
243.33
253.33
280.00
Sales
730.00
760.00
840.00
920.00
Cash collections
- 806.67
- 750.00
- 813.33
- 893.33
collection =Begining receivable+(current quarter sales*60/90)
320+(730*60/90)
243.33+(760*60/90)
253.33+(840*60/90)
280+(920*60/90)
Ending receivables
243.33
253.33
280.00
306.67