Logan Township acquired its water system from a private company onJune 1. No receivables were acquired with the purchase. Therefore, totalaccounts receivable on June 1 had a zero balance.Logan plans to bill customers in the month following the month of sale,and 70% of the resulting billings will be collected during the billingmonth. 90% of the remaining balance should be collectible in the nextfollowing month. The remaining uncollectible amounts will relate tocitizens who have moved away. Such amounts are never expected to becollected and will be written off.Water sales during June are estimated at $4,000,000 and expected toincrease by 30% in July. August sales will be the same as July sales.What the Estimate the monthly cash collections for June, July, August, andSeptember.
Logan Township acquired its water system from a private company on
June 1. No receivables were acquired with the purchase. Therefore, total
accounts receivable on June 1 had a zero balance.
Logan plans to bill customers in the month following the month of sale,
and 70% of the resulting billings will be collected during the billing
month. 90% of the remaining balance should be collectible in the next
following month. The remaining uncollectible amounts will relate to
citizens who have moved away. Such amounts are never expected to be
collected and will be written off.
Water sales during June are estimated at $4,000,000 and expected to
increase by 30% in July. August sales will be the same as July sales.
What the Estimate the monthly cash collections for June, July, August, and
September.
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