Emerald Company Has the Following Expected Pattern of Collections on Credit

question 91

Multiple Choice

Emerald 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,Emerald Company has the following accounts receivable balances:
From April sales                                  $\$ 21,000$
From May sales                                    48,000
Emerald'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:

Items Reported

Specific financial data points or transaction details disclosed in a company’s financial statements.

Accounting

Accounting is the systematic process of recording, measuring, and communicating financial information about an entity, facilitating decision making and financial management.

Credit Balance

The amount of money a business owes to its creditors, represented as a liability on the balance sheet.

Gain on Sale of Land

The financial profit earned from selling land for more than its purchase cost.