Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale. Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts receivable on March 31 were $60,000.
The expected cash collections of Discus Productions for June are
A)$48,000.
B)$98,000.
C)$68,000.
D)$89,000.

Question

Quizplus · Accepted Answer

For June, the expected cash collections include cash sales for June, plus collections from sales on account in April, May, and June. - Cash sales for June (10% of $80,000): $8,000- Collections from April sales (10% of $120,000): $12,000- Collections from May sales (30% of $100,000): $30,000- Collections from June sales (60% of $80,000): $48,000Adding these amounts: $8,000 + $12,000 + $30,000 + $48,000 = $98,000

Discus Productions Needs to Know Its Anticipated Cash Inflows for the Next