Green Landscaping Inc. is preparing its budget for the first quarter of 2017. Th
ID: 2572886 • 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, $93,460; December 2016, $81,960; January 2017, $101,670; February 2017, $121,970; March 2017, $131,840.
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, $16,430; January 2017, $17,530; February 2017, $19,680; March 2017, $19,390.
(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.
January
February
March
Quarter
(2) Expected payments for landscaping supplies.
January
February
March
Quarter
(b)
Determine the following balances at March 31, 2017:
Schedule of Expected Collections From Clients
For the Year Ending March 31, 2017March 31, 2017For the Quarter Ending March 31, 2017
January
February
March
Quarter
November $ $ $ $ December January February March Total collections $ $ $ $Explanation / Answer
1. cash collections
Working:
2. Expected cash payment
3. Receivable and payable balance
Green landscaping Inc. Schedule of expected Cash collections For the quarter ended March 31 Month Particulars January February March Total November 9,346 December 24,588 8,196 32,784 January 61,002 30,501 10,167 101,670 February 73,182 36,591 109,773 March 79,104 79,104 Total collections 94,936 111,879 125,862 323,331Related Questions
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