Brown Company estimates that monthly sales will be as follows:
Historical trends indicate that 40% of sales is collected during the month of sale, 50% is collected in the month following the sale, and 10% is collected two months after the sale. Brown's accounts receivable balance as of December 31 totals $80,000 ($72,000 from December's sales and $8,000 from November's sales). The amount of cash Brown can expect to collect during the month of January is:
A) $76,800
B) $84,000
C) $108,000
D) $133,000

Question

Brown Company estimates that monthly sales will be as follows:
 Historical trends indicate that 40% of sales is collected during the month of sale, 50% is collected in the month following the sale, and 10% is collected two months after the sale. Brown's accounts receivable balance as of December 31 totals $80,000 ($72,000 from December's sales and $8,000 from November's sales). The amount of cash Brown can expect to collect during the month of January is:
A) $76,800 
B) $84,000 
C) $108,000 
D) $133,000

Quizplus · Accepted Answer

The Answer of Brown Company estimates that monthly sales will be as follows:
 Historical trends indicate that 40% of sales is collected during the month of sale, 50% is collected in the month following the sale, and 10% is collected two months after the sale. Brown's accounts receivable balance as of December 31 totals $80,000 ($72,000 from December's sales and $8,000 from November's sales). The amount of cash Brown can expect to collect during the month of January is:
A) $76,800 
B) $84,000 
C) $108,000 
D) $133,000

Brown Company Estimates That Monthly Sales Will Be as Follows