The following information is available for them: Accounte Recelvable on December 31 (prior year) is $350,000, Sales from Quarter 1 will be $300,000, Sales from Quarter 2 will be $250,000, Soles from Quarter 3 will be $500,000, and Sales from quarter 4 will be $600,000. Ueing budget standarde, the cash to be collected for the first quarter will consist of the accounte receivable balance on December 31 (prior year) and 70\% of the sales made during the 1 st quarter. For future quartere, 70\% of eales will be collected in each current quarter and 30\% will be collected in the quarter after the cale. How much cash will Buffalo Corporation collect next year? a) 1,930,000 b.) 2,000,000 e) 1,470,000 d) 1,820,000
Q. The following information is available for them: Accounte Recelvable on December 31 (prior year) is $350,000, Sales from Quarter 1 will be $300,000, Sales from Quarter 2 will be $250,000, Soles from Quarter 3 will be $500,000, and Sales from quarter 4 will be $600,000. Ueing budget standarde, the cash to be collected for the first quarter will consist of the accounte receivable balance on December 31 (prior year) and 70\% of the sales made during the 1 st quarter. For future quartere, 70\% of eales will be collected in each current quarter and 30\% will be collected in the quarter after the cale. How much cash will Buffalo Corporation collect next year? a) 1,930,000 b.) 2,000,000 e) 1,470,000 d) 1,820,000
Calculate Cash Collected: Calculate the cash collected from the accounts receivable balance on December 31 (prior year).Cash collected from accounts receivable = $350,000
1st Quarter Sales: Calculate the cash collected from the sales made during the 1st quarter.70% of the 1st quarter sales = 70% of $300,000 = $210,000
Total Cash Collected: Add the cash collected from the accounts receivable balance and the 1st quarter sales to get the total cash collected in the 1st quarter.Total cash collected in the 1st quarter = $350,000+$210,000=$560,000
2nd Quarter Cash: Calculate the cash collected in the 2nd quarter from the 2nd quarter sales and the remaining 30% of the 1st quarter sales.70% of the 2nd quarter sales = 70% of $250,000 = $175,00030% of the 1st quarter sales = 30% of $300,000 = $90,000Total cash collected in the 2nd quarter = $175,000 + $90,000 = 70%1
3rd Quarter Cash: Calculate the cash collected in the 3rd quarter from the 3rd quarter sales and the remaining 30% of the 2nd quarter sales.70% of the 3rd quarter sales = 70% of $500,000 = $350,00030% of the 2nd quarter sales = 30% of $250,000 = $75,000Total cash collected in the 3rd quarter = $350,000 + $75,000 = 70%1
4th Quarter Cash: Calculate the cash collected in the 4th quarter from the 4th quarter sales and the remaining 30% of the 3rd quarter sales.70% of the 4th quarter sales = 70% of $600,000 = $420,00030% of the 3rd quarter sales = 30% of $500,000 = $150,000Total cash collected in the 4th quarter = $420,000+$150,000=$570,000
Total Cash Next Year: Add the cash collected from all quarters to find the total cash collected next year.Total cash collected next year = $560,000 (1st quarter) + $265,000 (2nd quarter) + $425,000 (3rd quarter) + $570,000 (4th quarter)Total cash collected next year = $560,000+$265,000+$425,000+$570,000=$1,820,000
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