Question

Westmore Products has projected the following quarterly sales. The accounts receivable at the beginning of the year is $380 and the collection period is 45 days. What are collections for the first quarter

Answer 1

Complete question:

Westmore Products has projected the following quarterly sales. The accounts receivable at the beginning of the year is $380 and the collection period is 45 days. What are collections for the first quarter?

Quater: Q1      Q2       Q3     Q4

Sales :  $675, $730, $815, $1,080

Answer:

$717.50

Explanation:

Given:

Accounts receivable at the beginning of the year = $380

Collection period = 45 days

Required:

Find the collections for the first quarter.

To find the collections for the first quarter, use the formula below:

First quarter collections = =Account receiveble opening balance to be recoverd in 45 days + [1st quarter sales /90*45]

$= 380 + (\frac{675}{90} *45)$

$= 380 + 337.5$

$= 717.50$

Collections for first quarter = $717.50