As of January 1 of the current year, the Butner Company had accounts receivables of $50,000.Sales for January, February, and March 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 the 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 February?
A) $132,000
B) $105,600
C) $133,600
D) $95,200

Question

Quizplus · Accepted Answer

First, we need to calculate the credit sales for each month:

January: $120,000 x 0.8 = $96,000
February: $140,000 x 0.8 = $112,000
March: $150,000 x 0.8 = $120,000

Then, we need to calculate the collections for each month:

January:
- 40% of January credit sales: $96,000 x 0.4 = $38,400 (collected in February)
- 60% of January credit sales: $96,000 x 0.6 = $57,600 (collected in January)
Total collections in January: $38,400 + $57,600 = $96,000

February:
- Cash sales: $140,000 x 0.2 = $28,000
- 40% of January credit sales (collected in February): $38,400
- 60% of February credit sales (collected in February): $112,000 x 0.6 = $67,200
Total collections in February: $28,000 + $38,400 + $67,200 = $133,600

Therefore, the answer is C) $133,600.

As of January 1 of the Current Year, the Butner