The Deluxe Corporation has a 45 day accounts receivable period. The estimated quarterly sales for this year, starting with the ﬁrst quarter, are $1,700, $2,100, $3,500, and $2,500, respectively. What is
The accounts receivable balance at the beginning of the second quarter? Assume that a year has
360 days.

Question

Quizplus · Accepted Answer

The accounts receivable balance at the beginning of the second quarter is based on the sales from the first quarter that have not yet been collected. With a 45-day collection period and 90 days in a quarter, half of the first quarter's sales are still outstanding. Therefore, the accounts receivable balance is 0.5 * $1,700 = $850.

The Deluxe Corporation Has a 45 Day Accounts Receivable Period