The following information concerns Montero Corp.

                   Purchases  Sales
January  $42,000  $72,000
February  48,000  66,000
March      36,000  60,000
April      54,000  78,000

Collections from Montero Corp.'s customers are normally 70% in the month of sale, and 20% and 9%, respectively, in the 2 months following the sale. The balance is uncollectible. Montero takes full advantage of the 2% discount allowed on purchases paid for by the 10th of the following month. Purchases for May are budgeted at $60,000, and sales for May are forecasted at $66,000. Cash disbursements for expenses are expected to be $14,400 for the month of May. Montero's cash balance at May 1 was $22,000.

What are Montero's expected cash collections during May?
A. $46,200
B. $61,800
C. $66,000
D. $67,200

Answer rating: 100% (QA)

Solution 1 Calculation of expected cash in April and May Expected Cash Collection fot the month of A... View the full answer