A Company Has Forecast Sales in the First Three Months

question 20

Multiple Choice

A company has forecast sales in the first three months of the year as follows (figures in millions) : January,$80; February,$60; March,$40.70% of sales are usually paid for in the month that they take place,20% in the following month,and the final 10% in the month after that.Receivables at the end of December were $23 million.What are the forecasted collections on accounts receivable in March?

• A)$180 million
• B)$13 million
• C)$40 million
• D)$48 million

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Definitions:

Qualified Profit-Sharing

A retirement plan that allows employers to contribute to their employees' retirement savings, which are then invested and allocated to individual accounts.

Additional Tax

The extra amount of tax that taxpayers may owe after their initial tax payment or withholding.

IRS Tax Levy

A legal seizure by the Internal Revenue Service to capture property or assets to satisfy a tax debt.

Health Insurance Premiums

Payments made to health insurance companies to maintain coverage and ensure medical care is covered, often deductible on taxes.