Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Aria is anticipating an increase in her business' sales for next year. She is constructing a Cash Collections Budget to see if she has enough
Aria is anticipating an increase in her business' sales for next year. She is constructing a Cash Collections Budget to see if she has enough to pay a part-time employee to help her. In order to make the hire, Aria would need Total Cash Collections for each quarter to be more than $70,000. Aria's Accounts receivable balance from the prior year is $50,000, her Quarter 1 sales are $65,000, her Quarter 2 sales are $70,000, her Quarter 3 sales are $80,000, and her Quarter 4 sales are $65,000. Assuming 60% of sales is collected in the quarter in which it was earned and 40% is collected in the following quarter, will she have enough to pay a part-time employee? No, her Total Cash Collections from Quarter 1 are too low. No, her Total Cash Collections from Quarter 4 are too low. Yes, she will have enough Total Cash Collections to hire the part-time employee. No, her Total Cash Collections from Quarter 2 are too low
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started