Problem:
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