Reference no: EM132547384

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