Question

The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year:

	Q1			Q2			Q3			Q4
Sales	$	750		$	780		$	860		$	940

a.	Accounts receivable at the beginning of the year are $340. 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.):

	Q1		Q2		Q3		Q4
Beginning receivables	$		$		$		$
Sales	750.00		780.00		860.00		940.00
Cash collections
Ending receivables	$		$		$		$

b.	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.)

	Q1		Q2		Q3		Q4
Beginning receivables	$		$		$		$
Sales	750.00		780.00		860.00		940.00
Cash collections
Ending receivables	$		$		$		$

c.	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
Beginning receivables	$		$		$		$
Sales	750.00		780.00		860.00		940.00
Cash collections
Ending receivables	$		$		$		$

Answer 1

Ans :

	Q1	Q2	Q3	Q4
Beginning receivables	340	375	390	430
Sales	750	780	860	940
cash collections	715	765	820	900
Ending receivables	375	390	430	470

collection of current sales = (90-45)/90 = 0.5

collection of current sales = 1/2 of current sales '

cash collection = Beginning receivables + 1/2 of sales

Ending receivable = Beginning receivables  + sales - cash collection

(b)

	Q1	Q2	Q3	Q4
Beginning receivables	340	500	520	573.33
Sales	750	780	860	940
cash collections	590	760	806.67	886.67
Ending receivables	500	520	573.33	626.67

collection of current sales = (90-60)/90 = 1/3

collection of current sales = 1/3 of current sales

cash collection = Beginning receivables + 1/3 of sales

Ending receivable = Beginning receivables  + sales - cash collection

(C)

	Q1	Q2	Q3	Q4
Beginning receivables	340	250	260	287
Sales	750	780	860	940
cash collections	840	770	833.33	913.33
Ending receivables	250	260	286.67	313.33

collection of current sales = 2/3 of current sales

collection of current sales = (90-30)/90 = 2/3

cash collection = Beginning receivables + 2/3 of sales

Ending receivable = Beginning receivables  + sales - cash collection