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In: Accounting
Exercise 1) Accountics Corp. expects service revenue in the next 6 months as follows: November $216,000...
Exercise 1) Accountics Corp. expects service revenue in the next 6 months as follows: November $216,000 February $195,000 December $355,000 March $370,000 January $280,000 April $555,000 Prior experience has shown that the following collections are made: 22.77 percent of a month’s revenue is collected in the month the service is performed 25.03 percent in the month following the service being performed 18.99 percent in the second month following the service being performed 13.13 percent in the third month following the service being performed 7.82 percent in the fourth month following the service being performed Remainder is collected in the fifth month following the service being performed September and October service revenues were $175,000 and $190,000 respectively. Past experience shows that 3.33 percent of revenues are never collected (i.e., bad debts). Required: Estimate budgeted cash receipts (service revenue collected) for February, March, and April.
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Expert Solution
Sollution
| Schedule of expected cash collection--Accountics Corp. expects | ||||||
| Particulars | Working | February | Working | March | Working | April |
|
Cash received for September service revenue |
($175000*8.93%) | $15,627.50 | - | $0.00 | - | $0.00 |
| Cash received for October service revenue | ($190000*7.82%) | $14,858.00 | ($190000*8.93%) | $16,967.00 | - | $0.00 |
| Cash received for November service revenue | ($216000*13.13%) | $28,360.80 | ($216000*7.82%) | $16,891.20 | ($216000*8.93%) | $19,288.80 |
| Cash received for Decemberservice revenue | ($355000*18.99%) | $67,414.50 | ($355000*13.13%) | $46,611.50 | ($355000*7.82%) | $27,761.00 |
| Cash received for January service revenue | $280000*25.03%) | $70,084.00 | $280000*18.99%) | $53,172.00 | $280000*13.13%) | $36,764.00 |
|
Cash received for February service revenue |
($195000*22.77%) | $44,401.50 | ($195000*25.03%) | $48,808.50 | ($195000*18.99%) | $37,030.50 |
|
Cash received for March service revenue |
- | $0.00 | ($370000*22.77%) | $84,249.00 | ($370000*25.03%) | $92,611.00 |
| Cash received for April service revenue | - | $0.00 | - | $0.00 | ($555000*22.77%) | $126,373.50 |
| Budgeted Cash Receipt | $240,746.30 | $266,699.20 | $339,828.80 |
ekkarill92 answered 2 years agoRelated Solutions
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July 50,000 $
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August 80,000 $
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September 40,000 $
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October 30,000 $
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2 year
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