Thornton's Wholesalers has expected sales of $920, $870, $620, and $570 for the months of April through July, respectively. The accounts receivable period is 45 days. How much will the ﬁrm
Collect in the month of June? Assume that a year has 360 days.

Question

Quizplus · Accepted Answer

First, we need to calculate the total sales for the months of April through July:

$920 + $870 + $620 + $570 = $2,980

Next, we need to calculate the daily sales:

$2,980 / 120 days (4 months x 30 days) = $24.83

Since the accounts receivable period is 45 days, we need to multiply the daily sales by 45 to find the amount collected in June:

$24.83 x 45 = $1,117.35

However, we are only interested in the sales for June, so we need to subtract the sales in April and May:

$920 + $870 = $1,790

$1,117.35 - $1,790 = -$672.65

This means that the firm will not collect any sales in June, but rather will have a deficit due to collecting payments for sales made in April and May.

Therefore, the best choice is B, $895, which is not one of the given answer choices.

Thornton's Wholesalers Has Expected Sales of $920, $870, $620, and $570