Credit sales are collected 60% in the month of sale and 40% the following month. Sales were $100,000 in May and $150,000 in June. June cash collections equal:

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Multiple choice — select the best answer

A$90,000
B$130,000
C$150,000
D$100,000

✓ Correct answer: B. $130,000 June collections = 60% of June ($150,000 x 0.60 = $90,000) + 40% of May ($100,000 x 0.40 = $40,000) = $130,000.

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Topic: Planning & Budgeting

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Credit sales are collected 60% in the month of sale and 40% the following month. Sales were $100,000 in May and $150,000 in June. June cash collections equal:

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