Ajax Corporation Estimates That for Credit Sales, 20% of Cash

question 151

Multiple Choice

Ajax Corporation estimates that for credit sales, 20% of cash is received in the month of sale; 60% in the month after the sale, and 15% second month after the sale. The remainder is never collected. Ajax had credit sales of $23,000 in January; $23,000 in February, and $19,000 in March. Given the following information, determine the cash collections for March.

• A) $18,500
• B) $20,600
• C) $22,700
• D) $24,800
• E) $26,900

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Definitions:

Endoplasmic Reticulum

A network of membranes within the cytoplasm of eukaryotic cells involved in protein and lipid synthesis, and calcium storage.

Myelin

Myelin is a fatty substance that forms a sheath around the axons of neurons, facilitating faster transmission of electrical impulses along the nerve cells.

Axon

A lengthy, slim part of a nerve cell, known as a neuron, that typically moves electrical impulses from the neuron's core body.

Impulses

Sudden, involuntary urges to perform an action or a series of actions without conscious thought.