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Upon graduation from your master's program, you have been hired by Tarheel Rehabilitation Clinic to manage a new prosthetic / orthotic supply division of the

Upon graduation from your master's program, you have 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 of whom pay for the devices themselves and some of whom have the bill paid by a third
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). You estimate 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
Assumed collection pattern Collected Remaining
Month of sale 0%0%
One month after sale 0%0%
Two months after sale 0%0%
Monthly Report Quarterly Report
Month Days Sales A/R Sales ADS ACP
January 31 $100 $0
February 28 $200 $0
March 31 $300 $0 $0 $0.000.0
April 30 $400 $0
May 31 $500 $0
June 30 $600 $0 $0 $0.000.0
July 31 $675 $0
August 31 $725 $0
September 30 $750 $0 $0 $0.000.0
October 31 $750 $0
November 30 $750 $0
December 31 $750 $0 $0 $0.000.0
End of March End of June
Age of account A/R % A/R %
0-30 days $00.0% $00.0%
30-60 days $00.0% $00.0%
60-90 days $00.0% $00.0%
Total $00.0% $00.0%
End of September End of December
Age of account A/R % A/R %
0-30 days $00.0% $00.0%
30-60 days $00.0% $00.0%
60-90 days $00.0% $00.0%
Total $00.0% $00.0%

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