The sales for January, February, and March are $50,000, $80,000 and $1

The sales for January, February, and March are $50,000, $80,000 and $120,000, respectively.

For any particular month of sales, the following percentages are received over time in cash: 40% in cash from that same month of sales; 50% in cash from the previous month’s sales; and, 10% in cash from the sales from two months ago. What amount of cash will be received during March?
A) $93,000
B) $97,500
C) $108,000
D) $120,000

ANSWER

Answer: A
Explanation: A) Cash received during or by the end of March is: 0.4 × March Sales + 0.5 × February Sales + 0.1 × January Sales = 0.4 × $120,000 + 0.5 × $80,000 + 0.1 × $50,000 = $48,000 + $40,000 + $5,000 = $93,000.