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 first month after the sale
• 8 percent in the second month after the sale

Two percent of the credit sales for each month are expected to be written off as uncollectible at the end of the second month after 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.

1.

The expected cash collections of Discus Productions for June are

$78,200.

$98,000.

$78,840.

$86,840.

None of the answers listed is correct

$89,000.

2.

Discus Productions would expect to have an accounts receivable balance on June 30 of

$39,960

$42,000

$28,800.

$37,800

None of the answers listed is correct

$28,080