Wichita Industries' sales are 10% cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% in the next month, and 20% in the following month. On December 31, the accounts receivable balance includes $12,000 from November sales and $42,000 from December sales. Assume that total sales for January are budgeted to be $50,000. What are the expected cash receipts for January from the current and past sales?
A) $18,500.
B) $51,500.
C) $51,900.
D) $55,500.
E) $60,500.
E) $60,500.
*30% of December credit sales were collected in December. The $42,000 balance in accounts receivable at December 31 represents the remaining 70% of the December credit sales. **The balance of $12,000 from November sales in accounts receivable at December 31 represents the last 20% of November sales not yet collected.
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