Problem 1

FOURHEAD Co. has the following expected pattern of collections on credit sales:

70% collected in the month of sale,

15% in the month after the month of sale, and

14% in the second month after the month of sale.

The remaining 1% is never collected. At the end of May, FOURHEAD Co. has the following accounts receivable balances:

From April sales 21,000

From May sales 48,000

FOURHEAD Co.'s expected sales for June are 150,000.

Determine how much cash the company expects to collect in June.