The sales terms for Jensen Company are 10 percent down and the balance due by the end of the following month. Sales for January, February and March were $8,500, $11,500 and $13,000 respectively. The cash collections from operations for the month of February would be closest to?
A) $7,600
B) $8,800
C) $10,350
D) $1,150

Question

Quizplus · Accepted Answer

For February, cash collections include 10% of February sales ($11,500 * 10% = $1,150) plus the balance of January sales after the 10% down payment ($8,500 - $850 = $7,650). Adding these together gives $1,150 + $7,650 = $8,800.

The Sales Terms for Jensen Company Are 10 Percent Down