A firm has forecasted sales of $4,000 in January,$6,000 in February,and $5,500 in March.All sales are on credit.40% is collected the month of sale and the remainder the following month.How much is collected from accounts receivable in February?
A) $5,400
B) $4,800
C) $6,000
D) $3,000

Question

Quizplus · Accepted Answer

40% of January sales ($4,000) is collected in January, which is $1,600.
60% of January sales ($4,000) is collected in February, which is $2,400.
40% of February sales ($6,000) is collected in February, which is $2,400.
Therefore, the total collected in February is $1,600 + $2,400 + $2,400 = $6,400.
But we only need to find out how much is collected from accounts receivable in February. 
So, we need to subtract the amount collected in January ($1,600) from the total collected in February ($6,400).
Therefore, the amount collected from accounts receivable in February is $6,400 - $1,600 = $4,800.

A Firm Has Forecasted Sales of $4,000 in January,$6,000 in February,and