As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March of 2012 were as follows: $120,000, $140,000 and $150,000. 20% of each month's sales are for cash. Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with remaining 40% collected in the following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of January?
A) $$74,000
B) $110,000
C) $71,600
D) $131,600

Question

Quizplus · Accepted Answer

In January, cash collected includes: $50,000 from accounts receivable, $24,000 from cash sales (20% of $120,000), and $57,600 from credit sales (60% of 80% of $120,000). Total = $50,000 + $24,000 + $57,600 = $131,600.

As of January 1 of the Current Year, the Grackle $$74,000 B) $110,000 C) $71,600 D) $131,600

As of January 1 of the Current Year, the Grackle $$74,000
B) $110,000
C) $71,600
D) $131,600