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
Prepare a schedule of cash receipts for August and September.