Question

ABC, Inc. has a beginning receivables balance on January 1st of $590. Sales for January through April are $350, $380, $460 and $480, respectively. The accounts receivable period is 60 days. How much did the firm collect in the month of March? Assume that a year has 360 days.

a.$460
b.$350
c.$590
d.$480
e.$380

Answer 1

In March, ABC, Inc. collected a sum equivalent to its January and February sales combined, totaling $730, due to the 60-day accounts receivable period.

Step-by-step explanation:

The student asked about how much ABC, Inc. collected in the month of March, given that the company has an accounts receivable period of 60 days. To determine the collections for March, we need to look back 60 days from March, as that is the duration of the receivables period. Since sales in January were $350 and February were $380, the total collection in March should be the sum of these two months' sales, because those are the amounts that would be collected 60 days later.

Collections for March = January Sales + February Sales
Collections for March = $350 (January Sales) + $380 (February Sales)
Collections for March = $730

We can infer that the firm collected $730 in the month of March, which is not one of the presented options. It seems there might be an error with the multiple choice answers provided with the question.