Martinque and Son have a 60 day collection period. Sales for the next calendar y

Question

Martinque and Son have a 60 day collection period. Sales for the next calendar year are estimated at $1,200, $1,100 $2,300 and $1,800 respectively, by quarter starting with the first quarter of the year. Given this information which one of the following statements is correct? Assume that a year has 360 days.

1. The firm will collect $1,133 in Q2

2. The accounts receivable balance at the beginning of Quarter 4 will be $767

3. The firm will collect $367 from Q2 sales in Q3

4. The firm will have an accounts receivable balance of $1,200 at the end of the year.

5. The firm will collect a total of $1,967 in Q4

Explanation / Answer

4.         The firm will have an accounts receivable balance of $1,200 at the end of the year

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