Topaz Company Has the Following Expected Pattern of Collections on Credit

question 30

Multiple Choice

Topaz 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,Topaz Company has the following accounts receivable balances: $\begin{array}{lr}\text {From April sales }&\$21,000\\\text {From May sales }&48,000\\\end{array}$
Topaz's expected sales for June are $150,000.What were total sales for April?

• A)$150,000
• B)$72,414
• C)$70,000
• D)$140,000

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Definitions:

Commission

A commission is a fee paid to an agent or employee for completing a transaction or service, usually calculated as a percentage of the sale or transaction value.

Reimbursing

The act of compensating someone for expenses they have incurred on your behalf.

Holder in Due Course

A term that refers to a party who has acquired a negotiable instrument in good faith and for value, and thus has certain rights above the original payee.

Requirements

Conditions or capabilities needed for something to be achieved, such as the specifications for software or the qualifications for a job.