1) The Dawson Brothers have a 60 day collection period. Sales for the next calendar year are estimated at $1,800, $1,300, $2,200 and $2,000, respectively, by quarter starting with the first quarter of the year. Given this information, which one of the following statements is correct? Assume a year has 360 days. A. The firm will collect $1,200 in Quarter 2. B. The accounts receivable balance at the beginning of Quarter 4 will be $1,466.67. C. The firm will collect $866.67 from Quarter 3 sales in Quarter 4. D. The firm will have an accounts receivable balance of $666.67 at the end of the year. E. The firm will collect a total of $1,666.67 in Quarter 4.

2)

A manufacturing firm has a 90 day collection period. The firm produces seasonal

merchandise and thus has the least sales during the first quarter of a year and the highest level

of sales during the third quarter of a year. The firm maintains a relatively steady level of

production which means that its cash disbursements are fairly equal in all quarters. The firm is

most apt to face a cash-out situation in:

A. The first quarter.

B. The second quarter.

C. The third quarter.

D. The fourth quarter.

E. Any quarter, equally.

Please explain the asnwers