Acct (ACC-210-099WB) Queation 10 Farley Company reported the following informati

Question

Acct (ACC-210-099WB) Queation 10 Farley Company reported the following information for 2008 October November December $230,000 $220,000 $270,000 purchases $120,000 $128,000 $144,000 Marked out of 2 geted sales udgeted . All sales are on credit. ·Customer amounts on account are collected 50% in the month of sale and 50% in the following month. . Customer amounts on account are collected 50% in the month of sale and 50% in the following month. -Farley purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. . Accounts payable is used only for inventory acquisitions. How much cash will Farley receive during November? Select one: a. $110,000 b.$245,000 O c. $225,000 d. $220,000 Previous page

Explanation / Answer

SOLUTION

Farley will receive cash of $225,000

Receipt of cash during November-

October sales = $230,000 * 50% = $115,000

November sales = $220,000 * 50% = $110,000

Total receipts = $115,000 + $110,000 = $225,000

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