Aragon and Associates has found from past experience that 25% of its services are for cash. The remaining 75% are on credit. An aging schedule for accounts receivable reveals the following pattern:Ten percent of fees on credit are collected in the month that service is rendered.Sixty percent of fees on credit are collected in the month following service.Twenty-six percent of fees on credit are collected in the second month following service.Four percent of fees on credit are never collected.Fees (on credit) that have not been paid until the second month following performance of the legal service are considered overdue and are subject to a 3% late charge.Aragon has developed the following forecast of fees:May$180,000 June200,000 July190,000 August194,000 September240,000 Required:Prepare a schedule of cash receipts for August and September. If an amount box does not require an entry, leave it blank or enter "0". Round answers to the nearest dollar.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Aragon and Associates has found from past experience that 25% of its services are for cash. The remaining 75% are on credit. An aging schedule for accounts receivable reveals the following pattern:

Ten percent of fees on credit are collected in the month that service is rendered.
Sixty percent of fees on credit are collected in the month following service.
Twenty-six percent of fees on credit are collected in the second month following service.
Four percent of fees on credit are never collected.

Fees (on credit) that have not been paid until the second month following performance of the legal service are considered overdue and are subject to a 3% late charge.

Aragon has developed the following forecast of fees:

May	$180,000
June	200,000
July	190,000
August	194,000
September	240,000

Required:

Prepare a schedule of cash receipts for August and September. If an amount box does not require an entry, leave it blank or enter "0". Round answers to the nearest dollar.

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