Western Feed Mills Has Projected the Following Quarterly Sales Amounts

question 77

Multiple Choice

Western Feed Mills has projected the following quarterly sales amounts for the coming year. Accounts receivable at the beginning of the year are $325.Western Feed Mills has a 60-day collection period.How much cash will the firm collect in quarter 1 and quarter 2,respectively?

• A)$325; $498
• B)$498; $347
• C)$498; $530
• D)$672; $367
• E)$672; $540

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Definitions:

Banking System

The network of banking institutions and regulations that provide financial services to individuals, businesses, and the government.

Excess Reserves

The amount of reserves a bank holds beyond the required minimum, which can be lent out to stimulate economic activity or held to meet future needs.

Create Money

The process by which central banks or monetary authorities increase the money supply.

Deposit Account

A deposit account is a bank account that allows the holder to deposit and withdraw money, often earning interest, including savings accounts, checking accounts, and other transaction accounts.