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On January 1st, Company Y had $500 in Accounts Receivable. The company has January, February, and...

On January 1st, Company Y had $500 in Accounts Receivable. The company has January, February, and March sales of $100, $200, and $300 respectively. During each month, 30% of sales are done in cash, and the remaining 70% are credit sales. For credit sales, 75% are collected in the month of sale, and remaining 25% are collected in the following month. What is the total cash collected in the month of February? Can someone please explain in clear detail how to solve?

a.$235.5

b. $182.5

c.$165.5

d. $200.5

e. None of the above

business   accounting   
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Answer #1
Correct answer is: b. $182.50
Formulas and workings for understanding:
February
Cash sales of February $200 X 30% = $   60.00
credit sales of January ($100 X 70% X 25%) = $   17.50
credit sales of February ($200 X 70% X 75%) = $ 105.00
Total cash collected = $ 182.50
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