Morrissey Law Firm has found from past experience that 20 percent of its services are for cash.

Question:

Morrissey Law Firm has found from past experience that 20 percent of its services are for cash. The remaining 80 percent 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. Seventy percent of fees on credit are paid in the month following legal service.

c. Seventeen percent of fees on credit are paid in the second month following the legal service.

d. Three 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 percent late charge.

Morrissey has developed the following forecast of fees:

May ......$230,000

June .....250,000

July ......240,000

August ......240,000

September ....290,000

Required:

Prepare a schedule of cash receipts for August and September.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...