The Litzenberger Company has projected the following quarterly sales amounts for

Question

The Litzenberger Company has projected the following quarterly sales amounts for the coming year:

Accounts receivable at the beginning of the year are $290. Litzenberger has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following: (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16).Negative amounts should be indicated by a minus sign.)

Recalculate the cash collections with a collection period of 60 days. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16). Negative amounts should be indicated by a minus sign.)

Recalculate the cash collections with a collection period of 30 days. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16). Negative amounts should be indicated by a minus sign.)

The Litzenberger Company has projected the following quarterly sales amounts for the coming year:

Explanation / Answer

Answer a AR Collection period = 45 days i.e 1.5 months Q1 Q2 Q3 Q4 Beginning Receivables $290 $355 $370 $410 Sales $710 $740 $820 $900 Cash collections $645 $725 $780 $860 Ending receivables $355 $370 $410 $450 Answer b AR Collection period = 60 days i.e 2 months Q1 Q2 Q3 Q4 Beginning Receivables $290 $473 $493 $547 Sales $710 $740 $820 $900 Cash collections $527 $720 $767 $847 Ending receivables $473 $493 $547 $600 Answer c AR Collection period = 30 days i.e 1 month Q1 Q2 Q3 Q4 Beginning Receivables $290 $237 $247 $273 Sales $710 $740 $820 $900 Cash collections $763 $730 $793 $873 Ending receivables $237 $247 $273 $300

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