Aria is anticipating an increase in her business’ sales for next year. She is constructing a Cash Collections Budget to see if she has enough to pay a part-time employee to help her. In order to make the hire, Aria would need Total Cash Collections for each quarter to be more than $70,000. Aria’s Accounts receivable balance from the prior year is $50,000, her Quarter 1 sales are $65,000, her Quarter 2 sales are $70,000, her Quarter 3 sales are $80,000, and her Quarter 4 sales are $65,000.

Assuming 60% of sales is collected in the quarter in which it was earned and 40% is collected in the following quarter, will she have enough to pay a part-time employee?


No, her Total Cash Collections from Quarter 1 are too low.


No, her Total Cash Collections from Quarter 4 are too low.


Yes, she will have enough Total Cash Collections to hire the part-time employee.


No, her Total Cash Collections from Quarter 2 are too low.