Smith and Johnson have expected sales of £380, £340, £430 and £480 for the months of January through to April, respectively.The trade receivables period is 15 days.How much did the ﬁrm collect
In the month of March? Assume that a year has 360 days.

Question

Quizplus · Accepted Answer

To find out how much was collected in the month of March, we need to calculate the sales made in Jan, Feb, and Mar, since the trade receivables period is 15 days.

Total sales in Jan, Feb, and Mar = £380 + £340 + £430 = £1150

We now need to calculate what part of these sales were collected in March.

The average daily sales are calculated as:

Average daily sales = Total sales for the period / Number of days in the period

In this case, the period is 90 days (Jan, Feb, and Mar), so: 
Average daily sales = £1150 / 90 = £12.78

The amount collected in March is therefore:

Amount collected in March = Average daily sales x Number of days in March

= £12.78 x 31 = £395.58

Therefore, the closest answer is C) £385.

Smith and Johnson Have Expected Sales of £380, £340, £430