A company has forecast sales in the first three months of the year as follows (figures in millions): January, $90; February, $20; March, $30. 70 percent of sales are usually paid for in the month that they take place and 30 percent in the following month. Receivables at the end of December were $20 million. What are the forecasted collections on accounts receivable in March?

Question

Quizplus · Accepted Answer

Forecasted collections in March = (70% of March sales) + (30% of February sales)= (70% of $30 million) + (30% of $20 million)= $21 million + $6 million= $27 million

A Company Has Forecast Sales in the First Three Months