Kara Corporation has the following sales forecasts for the selected three-month period in 2011: Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
Minimum cash balance is $10,000.Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).
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How much cash would be collected in September from sales?
A) $15,400
B) $17,000
C) $16,000
D) $20,000

Question

Kara Corporation has the following sales forecasts for the selected three-month period in 2011:  Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
 Minimum cash balance is $10,000.Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).
-
How much cash would be collected in September from sales?
A) $15,400 
B) $17,000 
C) $16,000 
D) $20,000

Quizplus · Accepted Answer

Sales for September are $20,000. 80% of sales are collected in the month of sale, so $20,000 x 0.80 = $16,000.

Kara Corporation Has the Following Sales Forecasts for the Selected