FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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11. Castle Company had sales of $60,000 in December 2001. Sales for the first three
months of 2002 are:
Month Sales
January $40,000
February 50,000
March 55,000
In the past, Castle has found that 25% of the sales revenue is collected in the month of the
sale and 75% is collected in the following month. If this pattern continues, what will be
the amount of Castle Company’s cash receipts in February?
A. $42,500
B. $30,000
C. $47,500
D. $45,000
12. Knight Company has found that 30% of its sales are collected in the month of the sale
and the remainder of the sales are collected in the next month. If sales are expected to
be
$100,000 in April, $120,000 in May, and $80,000 in June, what is the estimated amount
of cash receipts for May?
A. $114,000
B. $106,000
C. $92,000
D. $108,000
13. In recent years, Princess Company has collected 20% of its sales in the month of the sale
and the other 80% in the following month. During the first three months of 2002,
Princess is anticipating sales of $350,000; $403,000; and $389,000, respectively. What is
the amount of
A. $301,200
B. $360,600
C. $400,200
D. $391,800
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