The MacFarlane Company has projected the following quarterly sales amounts for t
ID: 2788249 • Letter: T
Question
The MacFarlane Company has projected the following quarterly sales amounts for the coming year: Q1 S8,040 Q2 S9,840 Q3 $9,240 Q4 $7,740 Sales a. Accounts receivable at the beginning of the year are $3,840. 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.) Q1 $3840 Q2 Q3 Q4 Beginning receivables Sales Cash collections $ 4020 9,840 8940 4920 9,240 9540 $ 4620 7,740 8490 $ 3870 8,040 7860 Ending receivables $ 4020 S 4920 $ 4620 b. Accounts receivable at the beginning of the year are $3,840. 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.) Q1 $ 3840 Q3 Q4 Beginning receivables Sales Cash collections 8,040 9,840 9,240 7,740 Ending receivablesExplanation / Answer
b.
Q1
Q2
Q3
Q4
Beginning Receivable
$ 3,840
$ 5,360
$ 6,560
$ 6,160
Sales
$ 8,040
$ 9,840
$ 9,240
$ 7,740
Cash Collections
$ 6,520
$ 8,640
$ 9,640
$ 8,740
Ending Receivables
$ 5,360
$ 6,560
$ 6,160
$ 5,160
Explanation:
Cash collection period = 60 days
Quarterly cash collection = Balance of previous quarter + (90 – 60)/90 portion of current quarter sales
= Quarterly outstanding + 1/3 of current quarter sales
Ending Receivables = 2/3 of current quarter sales
For Quarter 1:
Cash Collections = $ 3,840 + ($ 8,040 x 1/3) = $ 3,840 + $ 2,680 = $ 6,520
Ending Receivables = 8,040 x 2/3 = $ 5,360
For Quarter 2:
Cash Collections = $ 5,360 + ($ 9,840 x 1/3) = $ 5,360 + $ 3,280 = $ 8,640
Ending Receivables = $ 9,840 x 2/3 = $ 6,560
For Quarter 3:
Cash Collections = $ 6,560 + ($ 9,240 x 1/3) = $ 6,560 + $ 3,080 = $ 9,640
Ending Receivables = $ 9,240 x 2/3 = $ 6,160
For Quarter 4:
Cash Collections = $ 6,160 + ($ 7,740 x 1/3) = $ 6,160 + $ 2,580 = $ 8,740
Ending Receivables = $ 7,740 x 2/3 = $ 5,160
c.
Q1
Q2
Q3
Q4
Beginning Receivable
$ 3,840
$ 2,680
$ 3,280
$ 3,080
Sales
$ 8,040
$ 9,840
$ 9,240
$ 7,740
Cash Collections
$ 9,200
$ 9,240
$ 9,440
$ 8,240
Ending Receivables
$ 2,680
$ 3,280
$ 3,080
$ 2,580
Explanation:
Cash collection period = 30 days
Quarterly cash collection = Balance of previous quarter + (90 – 30)/90 portion of current quarter sales
= Quarterly outstanding + 2/3 of current quarter sales
Ending Receivables = 1/3 of current quarter sales
For Quarter 1:
Cash Collections = $ 3,840 + ($ 8,040 x 2/3) = $ 3,840 + $ 5,360 = $ 9,200
Ending Receivables = 8,040 x 1/3 = $ 2,680
For Quarter 2:
Cash Collections = $ 2,680 + ($ 9,840 x 2/3) = $ 2,680 + $ 6,560 = $ 9,240
Ending Receivables = $ 9,840 x 1/3 = $ 3,280
For Quarter 3:
Cash Collections = $ 3,280 + ($ 9,240 x 2/3) = $ 3,280 + $ 6,160 = $ 9,440
Ending Receivables = $ 9,240 x 1/3 = $ 3,080
For Quarter 4:
Cash Collections = $ 3,080 + ($ 7,740 x 2/3) = $ 3,080 + $ 5,160 = $ 8,240
Ending Receivables = $ 7,740 x 1/3 = $ 2,580
Q1
Q2
Q3
Q4
Beginning Receivable
$ 3,840
$ 5,360
$ 6,560
$ 6,160
Sales
$ 8,040
$ 9,840
$ 9,240
$ 7,740
Cash Collections
$ 6,520
$ 8,640
$ 9,640
$ 8,740
Ending Receivables
$ 5,360
$ 6,560
$ 6,160
$ 5,160
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