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this is all that is provided Rich Jackson, a recent MHA graduate, has been hired by Tarheel Rehabilitation Clinic to manage a new prosthetic/orthotic supply
this is all that is provided
Rich Jackson, a recent MHA graduate, has been hired by Tarheel Rehabilitation Clinic to manage a new prosthetic/orthotic supply division of the company. The division would sell primarily to rehab patients, some ofwhom pay for the devices themselves and some of whom have the bill paid by a thirod party insurer. Sales would be slow during the first few months, rise during the middle of the year, and then level off by the end of the year. Sales estimates for the first year of operation are shown in the table below (in thousands of dollars). Rich estimates that 30 percent of the division's customers will pay in the month of sale, 50 percent will pay in the month following sale, and the remaining 20 percent will pay in the second month following the sale. Calculate the division's expected: - Accounts receivables (A/R) at the end of each month - Total sales for each quarter of operation - Average daily sales (ADS) for each quarter of operation - Average collection period (ACP) for each quarter of operation - Aging schedules for the end of each quarter ANSWER Assumed collection pattern Month of sale One month after sale Two months after sale Collected Remaining Quarterly Report ADS Monthly Report Days Month January 31 February 28 March 31 Sales S100 S200 $300 S400 S500 S600 $675 $725 $750 $750 $750 $750 A/R Sales ACP April 30 31 30 31 May June August 31 September 30 October31 November 30 December 31 End of March End of June Age of account 0-30 days 30-60 days 60-90 days Total A/R A/R End of End of December September Age of account 0-30 days 30-60 days 60-90 days Total A/R A/RStep by Step Solution
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