Question
Foamex Company has a 45 day collection period. Sales for the next four quarters are estimated at $20,000, $24,000, $28,000, and $36,000, respectively, starting with
Foamex Company has a 45 day collection period. Sales for the next four quarters are estimated at $20,000, $24,000, $28,000, and $36,000, respectively, starting with the first quarter of the year. Given this information, which one of the following statements is incorrect? Assume a 360 day year.
| The firm will have an accounts receivable balance of $16,000 at the end of the year. | ||
| The accounts receivable balance at the beginning of Quarter 4 will be $16,000. | ||
| The firm will collect $14,000 from Quarter 2 sales in Quarter 3. | ||
| The firm will collect $12,000 in Quarter 1. | ||
| The firm will collect a total of $32,000 in Quarter 4. |
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