As of January 1 of the Current Year,the Grackle Company

question 170

Multiple Choice

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,respectively.Of each month's sales,20% are for cash.Of the remaining 80% (the credit sales) ,60% are collected in the month of sale,with the 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?

• A) $129,600
• B) $62,400
• C) $133,600
• D) $91,200

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Definitions:

ROI Analysis

A financial metric used to evaluate the efficiency of an investment or compare the efficiency of several different investments, calculated by dividing the net profit from the investment by the initial cost of the investment.

Net Operating Income

The income generated from normal business operations, calculated as revenues minus operating expenses and excluding income from investments and taxes.

Average Operating Assets

The average value of assets used by a company in its operational activities, calculated over a certain period of time for analysis of performance efficiency.

Residual Income

The income that remains after subtracting all required costs of capital from the operating income; a measure of net profitability.