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# Calculating Cash Collection and Payments

26-5: Using Excel: The Litzenberger Company has projected the following quarterly sales amounts for the coming year:
Q1 Q2 Q3 Q4
Sales \$700 \$630 \$810 \$930

a. Accounts receivable at the beginning of the year are \$275. Litzenberger has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following:
Q1 Q2 Q3 Q4
Beginning receivables
Sales
Cash collections
Ending receivables

b. Rework (a) assuming a collection period of 60 days.
c. Rework (a) assuming a collection period of 30 days.
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26-8:Using Excel: The Thakor Corporation's purchases from suppliers in a quarter are equal to 75% of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 20% of sales, and interest and dividends are \$73 per quarter. No capital expenditures are planned.
Here are the projected quarterly sales:
Q1 Q2 Q3 Q4
Sales \$830 \$1,050 \$970 \$860

Sales for the first quarter of the following year are projected at \$970. Calculate the company's cash outlays by completing the following:

Q1 Q2 Q3 Q4
Payment of accounts
Wages, taxes and other expenses
Long-term financing expenses(interest and dividends)
Total

#### Solution Preview

Calculating Cash Collection and Payments

26-5: Using Excel: The Litzenberger Company has projected the following quarterly sales amounts for the coming year:
Q1 Q2 Q3 Q4
Sales \$700 \$630 \$810 \$930

a. Accounts receivable at the beginning of the year are \$275. Litzenberger has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following:
Q1 Q2 Q3 Q4
Beginning receivables
Sales
Cash collections
Ending receivables

b. Rework (a) assuming a collection period of 60 days.
c. Rework (a) assuming ...

#### Solution Summary

This solution is comprised of a detailed explanation to calculate cash collections in each of the four quarters.

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