Suppose that a company has the following Accounts Receivable collection pattern: 

Paid in the month of sale 30% 

Paid in the month following sale 70% All Sales are on credit. 

If Credit Sales for January and February are $200,000 and $100,000 respectively, the cash collection for February is:

a. $217,500 

b. $210,000 

c. $140,000 

d. $100,000 

e. $130,000

Answer rating: 100% (QA)

Computation of cash collection in the month of February Paid in the month of sa... View the full answer