Hiruit company's sales in December were $5,500. It expects sales to increase 10% in January and February and 15% in March. All of its sales are made on credit. The typical collection pattern is:
Gross margin is 30%. Inventory levels at the end of December are $900 and are expected to grow at the same rate as sales. Purchases are paid for the month after they are made. Net accounts receivable at the end of December are $400.
-In March, Hiruit should collect:
A) $7,653.25 cash from sales made in March and previous months.
B) $7,342.50 cash from sales made in March and previous months.
C) $7,030.10 cash from sales made in March and previous months.
D) $6,331.30 cash from sales made in March and previous months.
Correct Answer:
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