Question

Mahan corporation had sales on account of $30,000 in january, $40,000 in february, and $37,000 in march. 75% of the sales is collected in the month of the sale, and the remaining 25% of the sales is collected in the month following the sale. the amount of cash collected in march is anticipated to be______

a. $27,750
b. $97,750
c. $37,750
d. $37,000

Answer 1

The amount of cash collected by Mahan Corporation in March is $37,750, which includes 75% of March sales and the remaining 25% of February sales. Therefore correct option is C

Step-by-step explanation:

To determine the amount of cash collected in March by Mahan Corporation from its sales, we need to apply the given percentage collection rates to the sales made in both February and March.

According to the information, the company collects 75% of sales in the month of the sale and the remaining 25% in the following month.

In March, they will collect 75% of March sales, which is 0.75 × $37,000 = $27,750.

Additionally, they will collect the remaining 25% from February sales, which is 0.25 × $40,000 = $10,000.

So, the total collected in March will be $27,750 (March sales) + $10,000 (leftover from February) = $37,750.