Western Feed Mills has projected the following quarterly sales amounts for the coming year. Accounts receivable at the beginning of the year are $325.Western Feed Mills has a 60-day collection period.How much cash will the firm collect in quarter 1 and quarter 2,respectively?

Question

Western Feed Mills has projected the following quarterly sales amounts for the coming year.  Accounts receivable at the beginning of the year are $325.Western Feed Mills has a 60-day collection period.How much cash will the firm collect in quarter 1 and quarter 2,respectively?

Quizplus · Accepted Answer

Q₁ collections = $325 + 30/90($520) = $498; Q₂ collections = 60/90($520) + 30/90($550) = $530

Western Feed Mills Has Projected the Following Quarterly Sales Amounts