Cavanaugh Company Has the Following Expected Pattern of Collections on Credit

question 147

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:
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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