The PDQ Company Makes Collections on Credit Sales According to the Following

question 132

Multiple Choice

The PDQ Company makes collections on credit sales according to the following schedule:
25% in month of sale
70% in month following sale
4% in second month following sale
1% uncollectible
The following sales have been budgeted:
$\begin{array}{|l|r|}\hline \text { Month } & \text { Sales } \\\hline \text { April } & \$ 100,000 \\\hline \text { May } & 120,000 \\\hline \text { June } & 110,000 \\\hline\end{array}$
What would be the cash collections in June?

• A) $110,000.
• B) $111,500.
• C) $113,400.
• D) $115,500.

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Definitions:

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