A firm has actual sales in November of $1,000 and projected sales in December an

Question

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 expected cash receipts in January

are $700

are $2,100

are $1,900

cannot be determined with the information provided

are $700

are $2,100

are $1,900

cannot be determined with the information provided

Explanation / Answer

There fore Firm's total expected cash receipts are $ 2,100

Nov Dec Jan Sales 1000 3000 4000 Cash Received 1000*10% 1000*40%+3000*10% 1000*50%+3000*40%+4000*10% 100 700 2100

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