June sales were $40 000 while projected sales for July and August were $50 000 and $60 000, respectively. Sales are 40% cash and 60% credit. All credit sales are collected in the month following the sale. What are the expected collections for July?
A)$50 000
B)$54 000
C)$36 000
D)$44 000

Question

Quizplus · Accepted Answer

In July, cash collections will be 40% of July sales ($50,000 * 40% = $20,000) plus credit collections from June sales ($40,000 * 60% = $24,000), totaling $44,000.

June Sales Were $40 000 While Projected Sales for July