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

Q1 $3,900
Q2 $4,700
Q3 $4,300
Q4 $3,600

Accounts receivable at the beginning of the year are $1,700.

Required:
a. The company has a 45-day collection period. Calculate cash collections in each of the four quarters.
b. The company has a 60-day collection period. Calculate cash collections in each of the four quarters.
c. The company has a 30-day collection period. Calculate cash collections in each of the four quarters.

Respuesta :

Answer: Check attachment

Explanation:

The cash collection was calculated as:

a. (90-45)/90 = 1/2

Q1 = 1700 + (1/2 × 3900)

= 1700 + 1950

= 3650

Q2 = 1950 + (1/2 × 4700)

= 1950 + 2350

= 4300

Q3 = 2350 + (1/2 × 4300)

= 2350 + 2150

= 4500

Q4 = 2150 + (1/2 × 3600)

= 2150 + 1800

= 3950

Check the attachments for further information.

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