Reference no: EM132547430

Korn Inc., projects sales for its first three months of operation as follows:

                                October.             November.                   December

Credit sales            $100,000.             $150,000.                 $200,000

Cash sales             40,000.                   60,000.                    50,000

Total Sales                $140,000.               $210,000.             $250,000

Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purchases are paid for in the month of purchase; the balance is paid in the following month. It is expected that 50% of credit sales will be collected in the month following sale, 30% in the second month following the sale, and the balance the third month. A 5% discount is given if payment is received in the month following sale.

Question 1: What are the anticipated cash receipts for November?

Group of answer choices

Option 1: $160,000

Option 2: $107,500

Option 3: $105,000

Option 4: $110,000