Use the Information Below to Answer the Following Questions Past Records Ind Icate That Expected Receipts Collected from Debtors

question 28

Multiple Choice

Use the information below to answer the following questions. Jackson Bottle Yard, a recycling glass company, has supplied the following information in relation to their actual sales in 2017 and planned sales for the first quarter of 2018 .

$\begin{array} { l l r r r } & & \text { Cash } & \text { Credit } & \text { Total } \\ 2017 \text { Actual Sales for } & \text { November } & 25,000 & 25,000 & 50,000 \\ & \text { December } & 35,000 & 40,000 & 75,000 \\ 2018 \text { Estimated Sales for } & \text { January } & 15,000 & 20,000 & 35,000 \\ & \text { February } & 18,000 & 30,000 & 48,000 \\ & \text { March } & 22,000 & 40,000 & 62,000 \end{array}$

Past records ind icate that expected receipts collected from debtors will be:
60 per cent in the month of sale
40 percent in the month following the sale
-Refer to the table above. What is the projected cash inflow from accounts receivable in January?

• A)$43,000.
• B)$15,000.
• C)$20,000.
• D)$28,000.

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Definitions:

Impaired Asset

An asset that has a market value less than its carrying value on the balance sheet, indicating that it may not generate future benefits worth its listed value.

Amortizable Intangible Assets

Intangible assets subject to the process of amortization, spreading the cost over their useful life.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair value of its net tangible and identifiable intangible assets.

Expense

Economic costs that a business incurs through its operations to earn revenue, which are recorded on the income statement.