Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann

Exercise 2

Sharon's Electrical Service has signed a contract with Dekalb School District for electrical work. The contract is for $1.4 million to be paid in five installments as each one-fifth of the work is completed, with a 5-percent retainage. Sharon's expects these five milestones to be reached in the months of July, August, October, November, and January.
Required:
Calculate the amount of cash Sharon's can expect to receive and the month in which it will be received if the company bills in the month of the milestone and collects in the following month.