The MacFarlane Company has projected the following quarterly sales amounts for t

Question

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

a. Accounts receivable at the beginning of the year are $3,630. 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.)
  

b. Accounts receivable at the beginning of the year are $3,630. The company has a 60-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.)
  

c. Accounts receivable at the beginning of the year are $3,630. The company has a 30-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.)
  

Explanation / Answer

a CASH COLLECTION In EACH QUARTER Collection period 45 Days (45 days sales will be collected in the same quarter) Q1 Q2 Q3 Q4 A Beginning receivables $3,630 $3,915 $4,815 $4,515 Cash collection in Q1 $3630+ (45/90)*7830= 7545 B Sales $     7,830 9,630 9,030 7,530 Cash collection in Q2 $3915+ (45/90)*9630= 8730 C=A+(45/90)*B Cash collections $7,545 $8,730 $     9,330 $     8,280 Cash collection in Q3 $4815+ (45/90)*9030= 9330 D=A+B-C Ending receivables $3,915 $4,815 $4,515 $3,765 Cash collection in Q4 $4515+ (45/90)*7530= 8280 b. Collection period 60 Days (30 days sales will be collected in the same quarter) Q1 Q2 Q3 Q4 A Beginning receivables $3,630 $5,220 $6,420 $6,020 Cash collection in Q1 $3630+ (30/90)*7830= 6240 B Sales $     7,830 9,630 9,030 7,530 Cash collection in Q2 $5220+ (30/90)*9630= 8430 C=A+(30/90)*B Cash collections $6,240 $8,430 $     9,430 $     8,530 Cash collection in Q3 $6420+ (30/90)*9030= 9430 D=A+B-C Ending receivables $5,220 $6,420 $6,020 $5,020 Cash collection in Q4 $6020+ (30/90)*7530= 8530 c Collection period 30 Days (60 days sales will be collected in the same quarter) Q1 Q2 Q3 Q4 A Beginning receivables $3,630 $2,610 $3,210 $3,010 Cash collection in Q1 $3630+ (60/90)*7830= 8850 B Sales $     7,830 9,630 9,030 7,530 Cash collection in Q2 $2610+ (60/90)*9630= 9030 C=A+(60/90)*B Cash collections $8,850 $9,030 $     9,230 $     8,030 Cash collection in Q3 $3210+ (60/90)*9030= 9230 D=A+B-C Ending receivables $2,610 $3,210 $3,010 $2,510 Cash collection in Q4 $3010+ (60/90)*7530= 8030

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