Question
ALPHA, Inc. sells all of its products on credit. Purchases are 60% of the sales for the following quarter. The firm uses a 365-day year
ALPHA, Inc. sells all of its products on credit. Purchases are 60% of the sales for the following quarter. The firm uses a 365-day year and account averages where applicable in its computations. The financial manager of the firm provides the following relevant information:
| Accounts receivable period | 37 days |
| Inventory period | 51 days |
| Accounts payable period | 42 days |
| Account | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 |
| Sales | $7,000 | $6,000 | $8,000 | $9,000 |
| Wages | $2,000 | $1,500 | $2,000 | $2,500 |
| Overhead expenses | $500 | $400 | $500 | $600 |
| Dividends | $125 | $125 | $125 | $125 |
| Interest expense | $350 | $150 | $200 | $300 |
What is the accounts receivable balance at the end of Quarter 1?
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
3rd Edition
0073382426, 9780073382425
