Green Landscaping Inc. is preparing its budget for the first quarter of 2014. Th
ID: 2445338 • Letter: G
Question
Green Landscaping Inc. is preparing its budget for the first quarter of 2014. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected.
Clients usually pay 60% of their fee in the month that service is provided, 30% the month after, and 10% the second month after receiving service.
Actual service revenue for 2013 and expected service revenues for 2014 are November 2013, $93,450; December 2013, $81,280; January 2014, $103,860; February 2014, $122,680; March 2014, $131,540.
Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2013 and expected purchases for 2014 are December 2013, $18,080; January 2014, $17,530; February 2014, $16,510; March 2014, $24,000.
(a) Prepare the following schedules for each month in the first quarter of 2014 and for the quarter in total:
(1) Expected collections from clients.
GREEN LANDSCAPING INC.
Schedule of Expected Collections From Clients
For the Quarter Ending March 31, 2014
January
February
March
Quarter
(2) Expected payments for landscaping supplies.
GREEN LANDSCAPING INC.
Schedule of Expected Payments for Landscaping Supplies
For the Quarter Ending March 31, 2014
January
February
March
Quarter
(b) Determine the following balances at March 31, 2014:
GREEN LANDSCAPING INC.
Schedule of Expected Collections From Clients
For the Quarter Ending March 31, 2014
January
February
March
Quarter
November$
$
$
$
December January February March Total collections$
$
$
$
Explanation / Answer
A
(1) Expected collections from clients.
GREEN LANDSCAPING INC. Schedule of Expected Collections From Clients For the Quarter Ending March 31, 2014
in $
Services
jan
feb
march
Quarter
november
93450
9345
0
0
9345
december
81280
24384
8128
0
32512
january
103860
62316
31158
10386
103860
february
122680
0
73608
36804
110412
march
131540
0
0
78924
78924
Total
96045
112894
126114
335053
Working
Services
jan
feb
march
Quarter
november
93450
93450*10/100=9345
0
0
9345
december
81280
81280*30/100=24384
81280*10/100=8128
0
32512
january
103860
103860*60/100=62316
103860*30/100=31158
103860*10/100=10386
103860
february
122680
0
122680*60/100=73608
122680*30/100=36804
110412
march
131540
0
0
131540*60/100=78924
78924
Total
96045
112894
126114
335053
(2) Expected payments for landscaping supplies.
GREEN LANDSCAPING INC.
Schedule of Expected Payments for Landscaping Supplies
For the Quarter Ending March 31, 2014
in $
purchase
jan
feb
march
Quarter
december
18080
7232
0
0
7232
january
17530
10518
7012
0
17530
february
16510
0
9906
6604
16510
march
24000
0
0
14400
14400
Total
17750
16918
21004
55672
Working
purchase
jan
feb
march
Quarter
december
18080
18080*40/100=7232
0
0
7232
january
17530
17530*60/100=10518
17530*40/100=7012
0
17530
february
16510
0
16510*60/100=9906
16510*40/100=6604
16510
march
24000
0
0
24000*60/100=14400
14400
Total
17750
16918
21004
55672
(b) Determine the following balances at March 31, 2014:
1
Accounts receivable
$64,884
2
Accounts payable
$9,600
Working
Account Receivable
service
February
122680
122680*10/100=12268
12268
March
131540
131540*40/100=52616
52616
Total
64884
Account payable
Purchase
March
24000
24000*40/100=9600
9600
Total
9600
A
(1) Expected collections from clients.
GREEN LANDSCAPING INC. Schedule of Expected Collections From Clients For the Quarter Ending March 31, 2014
in $
Services
jan
feb
march
Quarter
november
93450
9345
0
0
9345
december
81280
24384
8128
0
32512
january
103860
62316
31158
10386
103860
february
122680
0
73608
36804
110412
march
131540
0
0
78924
78924
Total
96045
112894
126114
335053
Working
Services
jan
feb
march
Quarter
november
93450
93450*10/100=9345
0
0
9345
december
81280
81280*30/100=24384
81280*10/100=8128
0
32512
january
103860
103860*60/100=62316
103860*30/100=31158
103860*10/100=10386
103860
february
122680
0
122680*60/100=73608
122680*30/100=36804
110412
march
131540
0
0
131540*60/100=78924
78924
Total
96045
112894
126114
335053
(2) Expected payments for landscaping supplies.
GREEN LANDSCAPING INC.
Schedule of Expected Payments for Landscaping Supplies
For the Quarter Ending March 31, 2014
in $
purchase
jan
feb
march
Quarter
december
18080
7232
0
0
7232
january
17530
10518
7012
0
17530
february
16510
0
9906
6604
16510
march
24000
0
0
14400
14400
Total
17750
16918
21004
55672
Working
purchase
jan
feb
march
Quarter
december
18080
18080*40/100=7232
0
0
7232
january
17530
17530*60/100=10518
17530*40/100=7012
0
17530
february
16510
0
16510*60/100=9906
16510*40/100=6604
16510
march
24000
0
0
24000*60/100=14400
14400
Total
17750
16918
21004
55672
(b) Determine the following balances at March 31, 2014:
1
Accounts receivable
$64,884
2
Accounts payable
$9,600
Working
Account Receivable
service
February
122680
122680*10/100=12268
12268
March
131540
131540*40/100=52616
52616
Total
64884
Account payable
Purchase
March
24000
24000*40/100=9600
9600
Total
9600
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