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The following information is available for them: Accounte Recelvable on December 3131 (prior year) is $350,000\$350,000, Sales from Quarter 11 will be $300,000\$300,000, Sales from Quarter 22 will be $250,000\$250,000, Soles from Quarter 33 will be $500,000\$500,000, and Sales from quarter 44 will be $600,000\$600,000. Ueing budget standarde, the cash to be collected for the first quarter will consist of the accounte receivable balance on December 3131 (prior year) and 7070\% of the sales made during the 11 st quarter. For future quartere, 7070\% of eales will be collected in each current quarter and 3030\% will be collected in the quarter after the cale.\newline How much cash will Buffalo Corporation collect next year?\newline a) 1,930,0001,930,000\newline b.) 2,000,0002,000,000\newline e) 1,470,0001,470,000\newline d) 1,820,0001,820,000

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Q. The following information is available for them: Accounte Recelvable on December 3131 (prior year) is $350,000\$350,000, Sales from Quarter 11 will be $300,000\$300,000, Sales from Quarter 22 will be $250,000\$250,000, Soles from Quarter 33 will be $500,000\$500,000, and Sales from quarter 44 will be $600,000\$600,000. Ueing budget standarde, the cash to be collected for the first quarter will consist of the accounte receivable balance on December 3131 (prior year) and 7070\% of the sales made during the 11 st quarter. For future quartere, 7070\% of eales will be collected in each current quarter and 3030\% will be collected in the quarter after the cale.\newline How much cash will Buffalo Corporation collect next year?\newline a) 1,930,0001,930,000\newline b.) 2,000,0002,000,000\newline e) 1,470,0001,470,000\newline d) 1,820,0001,820,000
  1. Calculate Cash Collected: Calculate the cash collected from the accounts receivable balance on December 3131 (prior year).\newlineCash collected from accounts receivable = $350,000\$350,000
  2. 11st Quarter Sales: Calculate the cash collected from the sales made during the 11st quarter.\newline7070% of the 11st quarter sales = 7070% of $300,000\$300,000 = $210,000\$210,000
  3. Total Cash Collected: Add the cash collected from the accounts receivable balance and the 11st quarter sales to get the total cash collected in the 11st quarter.\newlineTotal cash collected in the 11st quarter = $350,000+$210,000=$560,000\$350,000 + \$210,000 = \$560,000
  4. 22nd Quarter Cash: Calculate the cash collected in the 22nd quarter from the 22nd quarter sales and the remaining 30%30\% of the 11st quarter sales.\newline70%70\% of the 22nd quarter sales = 70%70\% of $250,000\$250,000 = $175,000\$175,000\newline30%30\% of the 11st quarter sales = 30%30\% of $300,000\$300,000 = $90,000\$90,000\newlineTotal cash collected in the 22nd quarter = $175,000\$175,000 + $90,000\$90,000 = 70%70\%11
  5. 33rd Quarter Cash: Calculate the cash collected in the 33rd quarter from the 33rd quarter sales and the remaining 30%30\% of the 22nd quarter sales.\newline70%70\% of the 33rd quarter sales = 70%70\% of $500,000\$500,000 = $350,000\$350,000\newline30%30\% of the 22nd quarter sales = 30%30\% of $250,000\$250,000 = $75,000\$75,000\newlineTotal cash collected in the 33rd quarter = $350,000\$350,000 + $75,000\$75,000 = 70%70\%11
  6. 44th Quarter Cash: Calculate the cash collected in the 44th quarter from the 44th quarter sales and the remaining 3030% of the 33rd quarter sales.\newline7070% of the 44th quarter sales = 7070% of $600,000\$600,000 = $420,000\$420,000\newline3030% of the 33rd quarter sales = 3030% of $500,000\$500,000 = $150,000\$150,000\newlineTotal cash collected in the 44th quarter = $420,000+$150,000=$570,000\$420,000 + \$150,000 = \$570,000
  7. Total Cash Next Year: Add the cash collected from all quarters to find the total cash collected next year.\newlineTotal cash collected next year = $560,000\$560,000 (11st quarter) + $265,000\$265,000 (22nd quarter) + $425,000\$425,000 (33rd quarter) + $570,000\$570,000 (44th quarter)\newlineTotal cash collected next year = $560,000+$265,000+$425,000+$570,000=$1,820,000\$560,000 + \$265,000 + \$425,000 + \$570,000 = \$1,820,000

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