1.

Cash flow of accounts

receivable.

Myers and Associates, a famous law firm in California, bills its clients on the first of each month. Clients pay in the following fashion: 40% pay at the end of the first month, 30% pay at the end of the second month, 20% pay at the end of the third month, 5% pay at the end of the fourth month, and 5% default on their bills. Myers wants to know the anticipated cash flow for the first quarter of 2015 if the past billings and anticipated billings follow this same pattern. The actual and anticipated billings are as follows:

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Fourth Quarter Actual Billings			First Quarter Anticipated Billings
Oct.	Nov.	Dec.	Jan.	Feb.	Mar.
$223 comma 000

$180 comma 000

$170 comma 000

$195 comma 000

$203 comma 000

$241 comma 000

What is the anticipated cash flow for January of 2015 if past billings and anticipated billings follow this same pattern?

$nothing

(Round to the nearest dollar.)

2.

Cash flow of accounts

receivable.

Myers and Associates, a famous law firm in California, bills its clients on the first of each month. Clients pay in the following fashion: 40% pay at the end of the first month, 30% pay at the end of the second month, 20% pay at the end of the third month, 5% pay at the end of the fourth month, and 5% default on their bills. The company has hired a new accountant, who promises to increase the speed of payment by clients. The new collection times will be 60% at the end of the first month, 25% at the end of the second month, and 10% at the end of the third month. The uncollectible accounts will remain at 5%. What will be the new cash flow with this change for the first quarter of 2015 if the new system takes effect in January? Assume payments from the fourth quarter will stay on the old payment schedule.

Click on the icon

in order to copy its content into a spreadsheet

Fourth Quarter Actual Billings			First Quarter Anticipated Billings
Oct.	Nov.	Dec.	Jan.	Feb.	Mar.
$248 comma 000

$205 comma 000

$174 comma 000

$211 comma 000

$231 comma 000

$264 comma 000

What is the anticipated cash flow for January of 2015 if past billings follow the old billing patter and anticipated billings follow the new billing pattern?

$nothing

(Round to the nearest dollar.)