As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The 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 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?

Question

As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The 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 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?

Answer

$129,600

$62,400

$133,600

$91,200

Answer 1

As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The 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 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 January

Answer 2

To determine the total cash collected in the month of February, we need to calculate the cash collected from credit sales in January and February, and the cash collected from cash sales in February.

Step 1: Calculate the credit sales for January and February.
- January credit sales: 80% of $120,000 = $96,000
- February credit sales: 80% of $140,000 = $112,000

Step 2: Calculate the cash collected from credit sales in January and February.
- January cash collected: 60% of January credit sales = 60% of $96,000 = $57,600
- February cash collected from January credit sales: 40% of January credit sales = 40% of $96,000 = $38,400
- February cash collected from February credit sales: 60% of February credit sales = 60% of $112,000 = $67,200

Step 3: Calculate the cash collected from cash sales in February.
- February cash sales: 20% of $140,000 = $28,000

Step 4: Total cash collected in February.
- Total cash collected = cash collected from credit sales + cash collected from cash sales
- Total cash collected = $38,400 + $67,200 + $28,000 = $133,600

Therefore, the total cash collected in the month of February is $133,600.
The correct answer is $133,600.

Answer 3

To determine the total cash collected in the month of February, we need to calculate the cash collected from accounts receivable and cash sales separately, and then sum them up.

First, let's calculate the cash collected from accounts receivable:
1. The beginning accounts receivable for January is given as $50,000.
2. From the sales for January, 20% of $120,000 (cash sales) is $24,000.
3. The remaining 80% of credit sales ($96,000) are collected as follows:
- 60% collected in the month of sale: 60% of $96,000 is $57,600.
- The remaining 40% ($38,400) is collected in the following month (February).

Now let's calculate the cash sales for February:
1. Sales for February is given as $140,000.
2. 20% of $140,000 is $28,000, which represents the cash sales.

Finally, let's calculate the total cash collected in February by adding up the cash collected from accounts receivable and the cash sales:
$57,600 (collected credit sales from January) + $38,400 (collected credit sales from February) + $28,000 (cash sales) = $124,000.

Therefore, the total cash collected in the month of February is $124,000.

None of the answer choices provided matches this amount.