Baker Industries has a 45 day accounts receivable period. The estimated quarterly sales for this year, starting with the first quarter, are $1,200, $1,400, $1,900 and $3,200, respectively. How much does the firm expect to collect in the third quarter? Assume that a year has 360 days.

Question

Quizplus · Accepted Answer

The firm expects to collect $1,650 in the third quarter. This is calculated by considering the accounts receivable period of 45 days (1.5 months) and the sales from the previous quarters. For the third quarter, the collections will include the remaining 50% of the second quarter's sales ($1,400 * 50% = $700) and 50% of the third quarter's sales ($1,900 * 50% = $950). Adding these together gives $700 + $950 = $1,650.

Baker Industries Has a 45 Day Accounts Receivable Period