The firm expects cash to be collected in the following manner: 40 percent of rev

Question

The firm expects cash to be collected in the following manner:
40 percent of revenues collected in the month of work
50 percent of revenues collected in the month following work
10 percent of revenues collected in second month following work

Required

Prepare a cash receipts budget for the first quarter. If an amount is zero, enter "0".

How much will clients owe the company at the end of March if revenues are exactly as estimated?
$

Sales January February March March 31 balance Jan. $ $ $ $ Feb. --- Mar. --- --- Total $ $ $ $

Explanation / Answer

Cash received in January = 40%*100*100 =$4000 Cash received for January in Feb =50%*100*100 =$5000 Cash received for January in March =10%*100*100 =$1000 Cash received for February in Feb =40%*500*100 =$20000 Cash received for February in March =50%*500*100 =$25000 March 31st balance =10%*500*100 =$5000 Cash received for March in March =40%*400*100 =$16000 March 31st balance =60%*400*100 =$24000 Sales January February March March 31 balance Jan. $4000 $5000 $1000 $0 Feb. --- $20000 $25000 $5000 Mar. --- --- $16000 $24000 Total $4000 $25000 $42000 $29000 clients owe the company at the end of March = $29000

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