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: a. Ten percent of fees on credit are paid in the month that service is rendered. b. Sixty percent of fees on credit are paid in the month following service. c. Twenty-six percent of fees on credit are paid in the second month following service. d. 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.
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
a. Ten percent of fees on credit are paid in the month that service is rendered.
b. Sixty percent of fees on credit are paid in the month following service.
c. Twenty-six percent of fees on credit are paid in the second month following service.
d. 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
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.
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