Gianna runs a small business and is attempting to create a Cash Collections Budget, so she can determine her income for the first quarter of next year. She has an accounte receivable balance of $\$ 25,000$ at the end of this year and expects her $1$ st quarter sales for next year to be $\$ 75,000$ . $\newline$ If her standard is to collect $\mathbf{5 0 \%}$ of sales in the quarter in which it was earned, how much will her Total Cash Collections be for Quarter $1$ of next year? $\newline$ a.) $\$ 25,000$ $\newline$ b.) $\$ 75,000$ $\newline$ a) $\$ 62,500$ $\newline$ d.) $\$ 67,250$

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Solve one-step and two-step linear equations: word problems

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Q. Gianna runs a small business and is attempting to create a Cash Collections Budget, so she can determine her income for the first quarter of next year. She has an accounte receivable balance of

\$ 25,000

at the end of this year and expects her

1

st quarter sales for next year to be

\$ 75,000

\newline

If her standard is to collect

\mathbf{5 0 \%}

of sales in the quarter in which it was earned, how much will her Total Cash Collections be for Quarter

1

of next year?

\newline

a.)

\$ 25,000

\newline

b.)

\$ 75,000

\newline

\$ 62,500

\newline

d.)

\$ 67,250

Account Receivable Balance: Gianna's account receivable balance at the end of this year is $\$25,000$ . This amount is expected to be collected in the first quarter of next year.
$1$ st Quarter Sales: Gianna expects her $1$ st quarter sales for next year to be $\$75,000$ . According to her standard, she will collect $50\%$ of these sales in the quarter in which it was earned.
Calculation of Collection: To find out how much she will collect from the sales of the first quarter, we calculate $50$ % of $\$75,000$ . $\$75,000 \times 50\% = \$75,000 \times 0.5 = \$37,500$
Total Collection: Now, we add the amount collected from the first quarter sales to the account receivable balance that will be collected. $\$25,000$ (account receivable balance) + $\$37,500$ ( $50$ \% of first quarter sales) = $\$62,500$