Noonan and Associates has found from past experience that 25 percent of its services are for cash. The remaining 75 percent are on credit. An aging schedule for accounts receivable reveals the following pattern:
a. 10 percent of fees on credit are paid in the month that service is rendered.
b. 60 percent of fees on credit are paid in the month following service.
c. 26 percent of fees on credit are paid in the second month following service.
d. 4 percent of fees on credit are never collected.
Fees (on credit) that have not been paid until the second month following performance of the service are considered overdue and are subject to a 3 percent late charge.
Noonan and Associates 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