As of January 1 of the Current Year, the Butner

question 163

Multiple Choice

As of January 1 of the current year, the Butner Company had accounts receivables of $50,000.Sales for January, February, and March were as follows: $120,000, $140,000, and $150,000.20% of each month's sales 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) $132,000
• B) $105,600
• C) $133,600
• D) $95,200

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Definitions:

Financial Assets

Assets that derive value because of a contractual claim, such as stocks, bonds, and bank deposits.

Current Liability

Refers to a company's financial obligations that are due to be settled within one year or within the normal operating cycle of the business.

Non-Current Liability

Liabilities not due for settlement within 12 months from the balance sheet date, representing longer-term financial obligations.

Financial Institution

An organization that provides financial services, such as banking, insurance, investment management, or brokerage services.