Use the following information for the next 5 questions.
Kelita, Inc., projects sales for its first three months of operation as follows: Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purchases are paid for in the month of purchase; the balance is paid in the following month. It is expected that 50% of credit sales will be collected in the month following sale, 30% in the second month following the sale, and the balance the third month. A 5% discount is given if payment is received in the month following sale.
-What are the anticipated cash receipts for October?
A) $-0-
B) $40,000
C) $47,500
D) $66,500

Question

Use the following information for the next 5 questions.
Kelita, Inc., projects sales for its first three months of operation as follows:  Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purchases are paid for in the month of purchase; the balance is paid in the following month. It is expected that 50% of credit sales will be collected in the month following sale, 30% in the second month following the sale, and the balance the third month. A 5% discount is given if payment is received in the month following sale.
-What are the anticipated cash receipts for October?
A) $-0- 
B) $40,000 
C) $47,500 
D) $66,500

Quizplus · Accepted Answer

The anticipated cash receipts for October are $40,000. This is because the company expects to collect $40,000 from customers in October.

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