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The firm has projected next year's quarterly sales at $960, $890, $980, and $1,050 for Quarters 1 to 4, respectively. Accounts receivable at the beginning of the year are $212 and the collection period is 18 days. What is the amount of the accounts receivable balance at the end of Quarter 2

Respuesta :

Answer:

$178

Explanation:

Given that,

Firm's projected next year quarterly sales:

Quarter 1 = $960

Quarter 2 = $890

Quarter 3 = $980

Quarter 4 = $1,050

Beginning accounts receivables = $212

Collection period = 18 days

Collection in current quarter:

= (90 - Receivable period) ÷ 90

= (90 - 18) ÷ 90

= 0.80

Accounts receivable at the end of current quarter:

= 1 - Collection in current quarter

= 1 - 0.80

= 0.20

Accounts receivable at the end of quarter 2:

= Accounts receivable at the end of current quarter × Sales in quarter 2

= 0.20 × $890

= $178

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