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 O in order to copy its content into a spreadsheet Fourth Quarter Actual Billings Oc, First Quarter Anticipated Billings Nov. Dec. Jan. Feb. Mar. $489,000 $393,000 $376,000 $435,000 $463,000 $510,000 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? $ (Round to the nearest dollar.)
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 O in order to copy its content into a spreadsheet Fourth Quarter Actual Billings Oc, First Quarter Anticipated Billings Nov. Dec. Jan. Feb. Mar. $489,000 $393,000 $376,000 $435,000 $463,000 $510,000 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? $ (Round to the nearest dollar.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
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Transcribed Image Text: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
Oc.
Nov.
Dec.
Jan.
Feb.
Mar.
$526,000
$422,000
$380,000
$457,000
$478,000
$548,000
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?
$ 498,900 (Round to the nearest dollar.)
What is the anticipated cash flow for February of 2015 if past billings follow the old billing patter and anticipated billings follow the new billing pattern?
$ 498,150 (Round to the nearest dollar.)
What is the anticipated cash flow for March of 2015 if past billings follow the old billing patter and anticipated billings follow the new billing pattern?
$ 513,000 (Round to the nearest dollar.)
Transcribed Image Text: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 a in order to copy its content into a spreadsheet
Fourth Quarter Actual Billings
First Quarter Anticipated Billings
Feb,
Ot.
Nov.
Dec.
Jan.
Mar.
$489,000
$393,000
$376,000
$435,000
$463,000
$510,000
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?
(Round to the nearest dollar.)
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