Hiruit company\'s sales in December were $5,500. They expect sales to increase 1

Question

Hiruit company's sales in December were $5,500. They expect sales to increase 10% in January and February and 15% in March. All of its sales are made on credit. The typical collection pattern is: Collections % of total Receivables In month of sale 10% In 2nd month 70% in 3rd month 15% not collectible 5% Gross margin is 30%. Inventory levels at the end of December are $900 and are expected to grow at the same rate as sales. Purchases are paid for the month after they are made. Net accounts receivable at the end of December are $400. In March Hiruit should collect how much cash from sales made in March and previous months: a - $7653.25 b - $7342.50 c - $ 7030.10 d - $6331.30

Explanation / Answer

c - $ 7030.10

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