Hoover Company expects June sales to be $30,000.Of these sales,credit sales are expected to be $12,000.Collection of credit sales are 50% in the month of sale,40% in the month following sale and 5% two months following sale.The remaining 5% is uncollectible.________ is the expected cash collection in June from June sales.
A) $9,200
B) $14,000
C) $17,200
D) $24,000

Question

Quizplus · Accepted Answer

The expected cash collection in June from June sales includes 50% of the credit sales collected in the month of sale ($12,000 * 50% = $6,000) plus the cash sales ($30,000 - $12,000 = $18,000). Therefore, the total is $6,000 + $18,000 = $24,000.

Hoover Company Expects June Sales to Be $30,000