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Jensen Corporation Sales Forecast

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Jensen Corporation has the following sales forecasts for the selected three month period in 2011.

Month: Sales:
July $24,000
August $14,000
September $16,000

Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.

Accounts Receivable balance (July 1, 2011) $20,000
Cash Balance (July 1, 2011) $10,000

Minimum cash balance is $10,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).

How much cash would be collected in September from sales?

A. 15,400
B. 17,000
C. 16,000
D. 20,000

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This solution is comprised of a detailed explanation to answer how much cash would be collected in September from sales.

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Jensen Corporation has the following sales forecasts for the selected three month period in 2011.

Month: Sales:
July $24,000
August ...

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