A firm has actual sales in November of $1,000 and projected sales in December and January of $3,000 and $4,000, respectively. The firm makes 10 percent of its sales for cash, collects 40 percent of its sales one month following the sale, and collects the balance two months following the sale. The firm's total cash receipts in November is ________.
A) $1,000
B) $100
C) $700
D) $400

Question

Quizplus · Accepted Answer

The firm's total cash receipts in November include 10% of November sales ($1,000 * 10% = $100) since it collects 10 percent of its sales for cash. The rest of the collections are based on sales from previous months, which are not mentioned for October or earlier, so only the cash sales portion for November is counted.

A Firm Has Actual Sales in November of $1,000 and Projected