Preparing a Schedule of Cash Collections on Accounts Receivable
Kailua and Company is a legal services firm. All sales of legal services are billed to the client (there are no cash sales). Kailua expects that, on average, 20% will be paid in the month of billing, 50% will be paid in the month following billing, and 25% will be paid in the second month following billing. For the next five months, the following sales billings are expected:
May $84000
June 100800
July 77000
August 86100
September 89000
Required:
Prepare a schedule showing the cash expected in payments on accounts receivable in August and in September