Hours booked to clients in the year ending June 2002 were 30,000 hours. Christian calculated that the firm had a 10% market share last year, and is budgeting to increase market share to 15%. Average charge rate was 80 per hour. Average charge rate budgeted or next year should reflect indexed cost of living increase of 5%.

50%of fees were for cash, % were charged to credit and paid in the first month of billing, and 25% was charged to credit and paid in the second month of billing.

Analysis of accounts rec'ble at 30 June 2002 showed:
- $180000 was owed.
- $60 was due in each of the 3 months July, August and Sept.

I need to prepare a schedule of cash receipts from fees an accounts receivable for each of the 3 months July, August and September 2002.

I am getting confused! Any help would be greatly appreciated.

What exactly are you confused about?

Quote:

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Originally Posted by paraclete

what exactly are you confused about?

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Zz

[QUOTE=anjols3;3510952]

I have worked out the new budgeted fees:
Annual hours year ended 30/6/02 30000
Total market year ended 30/6/02 300000hrs
New market share 15% of total 45000hrs
New hourly rate $80 + 5% = $84 /hr
Budgeted fees receivable 3750hrs x $84 = $315000per mnth

Cash is 50% = $152500
Now I am not sure how to continue from here to prepare the schedule of cash receipts and a/c receivable. I am confused with how to calculate which collections from credit are for which month
Can you help?]