Ned's Co Has an Average Collection Period of 45 Days and and an Operating

question 52

Multiple Choice

Ned's Co. has an average collection period of 45 days and an operating cycle of 130 days. It has a policy of keeping at least $10 on hand as a minimum cash balance, and has a beginning cash
Balance for the first quarter of $20. Beginning receivables for the quarter amount to $35. Sales for
The first and second quarters are expected to be $110 and $125, respectively, while purchases
Amount to 80% of the next quarter's forecast sales. The accounts payable period is 90 days.
What are cash collections in the first quarter?

• A) $35
• B) $72
• C) $85
• D) $90
• E) $110

---

Definitions:

Overregularization

The application of rules of grammar even when exceptions occur, making the language seem more “regular” than it actually is.

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others and to understand that others have beliefs, desires, and intentions that are different from one's own.

Grammar

The set of rules and structures used to organize and construct meaningful sentences in a language.

Logical Extensions

Developments or conclusions that logically follow from a set of premises or fundamentals.