The Geller Company has projected the following quarterly sales amounts for the coming year: Q1 Q2 Q3 Q4 Sales $510 $540 $600 $750 a. Accounts receivable at the beginning of the year are $270. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to the nearest whole number, e. g., 32.)

Question

Nickolas Lewis

Business

24 September, 15:48

The Geller Company has projected the following quarterly sales amounts for the coming year: Q1 Q2 Q3 Q4 Sales $510 $540 $600 $750 a. Accounts receivable at the beginning of the year are $270. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to the nearest whole number, e. g., 32.)

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Answers (1)

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Nola · Answer 1

The correct answer are $525, $525, $570 and $675 respectively.

Explanation:

According to the scenario, the computation of the given data are as follows:

Collection period = 45 days

Days in one quarter = 90 days

So, Amount collected during the quarter = (90 - 45) / 90 = 1/2 of current sales + Beginning Accounts receivables

So, we can calculated the cash collection as follows:

Q1 Q2 Q3 Q4

Beginning A/c. receivables $270 $255 $270 $300

Sales $510 $540 $600 $750

Cash Collections $525 $525 $570 $675

Ending A/c Balance $255 $270 $300 $375

Note: Ending balance is the beginning balance for next quarter.