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Jensen Corporation Sales Forecast

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

Solution Preview

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

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

Solution Summary

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

$2.19