Question 1: Using Excel: The Litzenberger Company has projected the following quarterly sales amounts for the coming year:
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Q1
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Q2
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Q3
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Q4
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Sales
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$700
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$630
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$810
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$930
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a. Accounts receivable at the beginning of the year are $275. Litzenberger has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following:
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Q1
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Q2
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Q3
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Q4
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Beginning receivables
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Sales
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Cash collections
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Ending receivables
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b. Rework (a) assuming a collection period of 60 days.
c. Rework (a) assuming a collection period of 30 days.
Question 2: Using Excel: The Thakor Corporation's purchases from suppliers in a quarter are equal to 75% of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 20% of sales, and interest and dividends are $73 per quarter. No capital expenditures are planned.
Here are the projected quarterly sales:
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Q1
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Q2
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Q3
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Q4
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Sales
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$830
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$1,050
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$970
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$860
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Sales for the first quarter of the following year are projected at $970. Calculate the company's cash outlays by completing the following:
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Q1
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Q2
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Q3
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Q4
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Payment of accounts
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Wages, taxes and other expenses
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Long-term financing expenses(interest and dividends)
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Total
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