Green Landscaping Inc. is preparing its budget for the first quarter of 2017. Th
ID: 2449465 • Letter: G
Question
Green Landscaping Inc. is preparing its budget for the first quarter of 2017. 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 performed, 30% the month after, and 10% the second month after receiving service.
Actual service revenue for 2016 and expected service revenues for 2017 are November 2016, $94,110; December 2016, $84,830; January 2017, $102,390; February 2017, $123,530; March 2017, $131,560.
Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2016 and expected purchases for 2017 are December 2016, $17,540; January 2017, $16,370; February 2017, $18,950; March 2017, $19,050.
(a)
Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total:
(1) Expected collections from clients.
(2) Expected payments for landscaping supplies.
(b) Determine the following balances at March 31, 2017:
Exercise 9-18 Green Landscaping Inc. is preparing its budget for the first quarter of 2017. The next step in the budgeting process is to prepare a cash receipts schedule a 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 performed, 30% the month after, and 10% the second month after receiving service Actual service revenue for 2016 and expected service revenues for 2017 are November 2016, $94,110; December 2016, $84,830; January 2017, $102,390; February 2017, $123,530; March 2017, $131,560 Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2016 and expected purchases for 2017 are December 2016, $17,540; January 2017, $16,370; February 2017, $18,950; March 2017, $19,050 Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total: (1) Expected collections from clients GREEN LANDSCAPING INC. Schedule of Expected Collections From Clients Januar Februar March uarter November December January February March Total collections (2) Expected payments for landscaping supplies GREEN LANDSCAPING INC. Schedule of Expected Payments for Landscaping Supplies Januar Februar March uarter December January FebruaryExplanation / Answer
Month Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Service revenue 94,110 84,830 102,390 123,530 131,560 Purchase of Direct Materials 17,540 16,370 18,950 19,050 GREEN LANDSCAPING Inc, Schedule of expected collection from Clients Details January February March Quarter Collection of November Service revenue 9,411 9,411 Collection of December Service revenue 25,449 8,483 33,932 Collection of Jan Service revenue 61,434 30,717 10,239 102,390 Collection of Feb Service revenue 74,118 37,059 111,177 Collection of Mar Service revenue 78,936 78,936 Total 96,294 113,318 126,234 335,846 GREEN LANDSCAPING Inc, Schedule of expected payments for Direct Materials Details January February March Quarter Purchase December 7,016 7,016 Purchase Jan 9,822 6,548 16,370 Purchase Feb 11,370 7,580 18,950 Purchase Mar 11,430 11,430 Total 16,838 17,918 19,010 53,766 Balances on Mar 31. 2017. Amt $ Accounts Receivable =10% of Feb rev+40% of Mar rev = $ 64,977.00 Accounts Payable =40% of mar purchase = $ 7,620.00
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