A. Given the following information, what is the amount of cash collection in the third quarter?
Q1 Beginning receivables = $50,000
Receivables period = 30 days
Sales Forecasts:
Quarter 1 sales = $60,000
Quarter 2 sales = $70,000
Quarter 3 sales = $80,000
Quarter 4 sales = $90,000
a. $66,667
b. $76,667
c. $80,000
d. $86,667
e. $90,000
B. Spectrum Corporation's credit sales in December, January, and February were $2,000, $4,000, and $6,000 respectively. Past experience shows that 50% of the receivables are paid in the month of sale and the remainder in the following month. If January's beginning accounts receivable balance was $800, determine the ending accounts receivable balance at the end of February.
$800
$1,800
$2,000
$2,800
$3,000