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Part 1

The following information pertains to sales of XYZ Company:

Collections of sales are generally 20% in cash and 80% in credit. This means in the month of the sale 20% is paid in cash to XYZ and XYZ extends credit for the remaining 80% of the sales.

The credits sales are collected as follows:

* 30% in the month of the sale,

* 60% in the month after the sale,

* 6% two months after the sale,

* 4% are never collected

If the December sales are $10,500, what are the collections of credit sales in the month of January?

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Part 1

A.

$2,100

B.

$5,040

C.

$8,400

D.

$10,500