Cash collections
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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:
Month Sales
April $100,000
May $120,000
June $110,000
Cash collections in June would be:
a. $113,400
b. $110,000
c. $111,000
d. $115,500
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Solution Summary
The solution explains how to calculate the cash collections.
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