The budgeted monthly service revenues for Causeway Contractors for January to June are presented below. The entitys
Question:
The budgeted monthly service revenues for Causeway Contractors for January to June are presented below. The entity’s experience is that 80% of monthly invoicing for services is on a credit basis. All cash sales receive an 8% discount. Of the credit sales, 40% are collected in the month following the service, 35% are collected in the second month following, and 22% are collected in the third month after invoicing; 3% are never collected. Total actual revenue invoiced during December was $23 000 and for November was $33 000. Ignore GST.
The projected service revenues by month are:
January February March April May June | $8000 18000 32000 52000 36000 24000 |
Required
Calculate the forecast cash receipts from clients for March, April and May.
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett