The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year: Q1 Q2 Q3 Q4 Sales $ 830 $ 860 $ 940 $ 970 a. Accounts receivable at the beginning of the year are $420. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following (A negative answer should be indicated by a minus sign. Round your answers to 2 decimal places, e. g., 32.16.):

Answer  and Explanation:

a. Q1 Q2 Q3 Q4

Collection period is 45 days    

cash collection of Current quarter sales (Total days in quarter- cash collection period)/total days in quarter(90-45)90=1/2  

Beginning receivable (A)420415430470

Sales (B)830860940970

Cash collections ©835.00845.00900.00955.00

420+(830*1/2)415+(860*1/2)430+(940*1/2)470+(970*1/2)

Ending receivables (A+B-C)415.00430.00470.00485.00

b.

Collection period is 60 days    

cash collection of Current quarter sales (Total days in quarter- cash collection period)/total days in quarter(90-60)90=1/3  

Beginning receivable (A)420553.33573.33626.67

Sales (B)830860940970

Cash collections ©696.67840.00886.67950.00

420+(830*1/3)553.33+(860*1/3)573.33+(940*1/3)626.67+(970*1/3)

Ending receivables (A+B-C)553.33573.33626.67646.67

c .

Collection period is 30 days    

cash collection of Current quarter sales (Total days in quarter- cash collection period)/total days in quarter(90-30)90=2/3  

Beginning receivable (A)420276.67286.67313.33

Sales (B)830860940970

Cash collections ©973.33850.00913.33960

420+(830*2/3)276.67+(860*2/3)286.67+(940*2/3)313.33+(970*2/3)

Ending receivables (A+B-C)276.67286.67313.33323.33

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