Problem:
Diamond Window Corp.'s sales, half of which are for cash, over the past three months were
- March- $140,000
- April- $240,000
- May- $160,000
Requirement:
Question 1: Estimate cash receipts in May if the collection period is 60 days.
Question 2: Estimate cash receipts in May if the collection period is 45 days.
Question 3: What would be the May balance of Account Receivable for Diamond Window if the company's collection period is 60 days? 45 days?
Note: Show supporting computations in good form.