Green Landscaping Inc. is preparing its budget for the first quarter of 2012. Th
ID: 2456884 • Letter: G
Question
Green Landscaping Inc. is preparing its budget for the first quarter of 2012. 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 2011 and expected service revenues for 2012 are: November 2011, $90,000; December 2011, $80,000; January 2012, $100,000; February 2012, $120,000; March 2012, $130,000.
Purchases of landscaping supplies (direct materials) are paid 40% in the month of purchase and 60% the following month. Actual purchases for 2011 and expected purchases for 2012 are: December 2011, $14,000; January 2012, $12,000; February 2012, $15,000; March 2012, $18,000.
(a) Prepare the following schedules for each month in the first quarter of 2012 and for the quarter in total:
(1) Expected collections from clients.
GREEN LANDSCAPING INC.
Schedule of Expected Collections From Clients
For the Quarter Ending March 31, 2012
January
February
March
Quarter
(2) Expected payments for landscaping supplies.
GREEN LANDSCAPING INC.
Schedule of Expected Payments for Landscaping Supplies
For the Quarter Ending March 31, 2012
January
February
March
Quarter
(b) Determine the following balances at March 31, 2012:
Open Show Work
GREEN LANDSCAPING INC.
Schedule of Expected Collections From Clients
For the Quarter Ending March 31, 2012
January
February
March
Quarter
November$
$
$
$
December January February March Total collections$
$
$
$
Explanation / Answer
Schedule of Expected Collections from Clients For the Quarter Ending March,2012 January February March Quarter November 9000 9000 December 24000 8000 32000 January 60000 30000 10000 100000 February 72000 36000 108000 March 78000 78000 Total 93000 110000 124000 327000 Schedule of Expected Payments For Landscaping Supplies January February March Quarter December 8400 8400 January 4800 7200 12000 February 6000 9000 15000 March 7200 7200 Total 13200 13200 16200 42600 Accounts Receivable Balance Total Services Provided(Nov,11 to Mar,12 520000 Less: Cash Received till March,12 As per Schedule -327000 Less: November,11 and December,11Payments Receved -129000 Accounts Receivable Balance 64000 Accounts Payable Balance Payments Pending For March,12 10800 Total 10800
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.