Cavanaugh Company Has the Following Expected Pattern of Collections on Credit

question 68

Multiple Choice

Cavanaugh Company has the following expected pattern of collections on credit sales: 70 percent collected in the month of sale,15 percent in the month after the month of sale,and 14 percent in the second month after the month of sale.The remaining 1 percent is never collected. At the end of May,Cavanaugh Company has the following accounts receivable balances:
From April sales $~~~~~~~~~$ $21,000
From May sales $~~~~~~~~~~$ 48,000 Cavanaugh's expected sales for June are $150,000.How much cash will Cavanaugh Company expect to collect in June?

• A)$127,400
• B)$129,000
• C)$148,600
• D)$152,520

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Definitions:

Resource Consumption

Resource consumption refers to the use of natural resources by humans for energy, food, materials, and other necessities.

Density-Dependent

Factors whose effects on the size or growth of a population vary with the population density.

Density-Independent

Referring to effects on population growth that are not related to the density of the population, such as weather disasters or human activities.

Predation

An interaction between two species where one organism (the predator) hunts and eats another organism (the prey).