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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