Jazzy Janitors has found that only 10% of its invoiced amounts are paid in the same month that the work is completed. Sixty percent are paid in the month after the work is completed and 30% are paid in the second month after the work is completed. During December 2013, Jazzy Janitors' invoiced $200,000 to clients. Projected revenues for the first six months of 2014 are given below: $$\begin{array} { l r }
{ \text { Month } } &\text { Revenue } \
\text { January } & \$ 180,000 \
\text { February } & 215,000 \
\text { March } & 220,000 \
\text { April } & 218,000 \
\text { May } & 240,000 \
\text { June } & 255,000
\end{array}$$ What is the expected Accounts Receivable balance at March 31, 2014?

Question

Jazzy Janitors has found that only 10% of its invoiced amounts are paid in the same month that the work is completed. Sixty percent are paid in the month after the work is completed and 30% are paid in the second month after the work is completed. During December 2013, Jazzy Janitors' invoiced $200,000 to clients. Projected revenues for the first six months of 2014 are given below: $$\begin{array} { l r } 
 { \text { Month } } &\text { Revenue }  \
\text { January } & \$ 180,000 \
\text { February } & 215,000 \
\text { March } & 220,000 \
\text { April } & 218,000 \
\text { May } & 240,000 \
\text { June } & 255,000
\end{array}$$ What is the expected Accounts Receivable balance at March 31, 2014?

Quizplus · Accepted Answer

The expected Accounts Receivable balance at March 31, 2014, includes amounts from January, February, and March. For January, 40% remains unpaid ($72,000), for February, 70% remains unpaid ($150,500), and for March, 90% remains unpaid ($198,000). Adding these gives $262,500.

Jazzy Janitors Has Found That Only 10% of Its Invoiced