Exercise 9-18 Green Landscaping Inc. is preparing its budget for the first quart
ID: 340980 • Letter: E
Question
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 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, $92,440; December 2016, $83,270; January 2017, $103,690; February 2017, 121,440; March 2017, $134,410 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, $16,270; January 2017, 15,270; February 2017, $18,730; March 2017, $21,600 Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total: (1) Expected collections from clients GREENL INC. Schedule of Expected C From Clients Februa March uarter Januar 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 February March Total payments Determine the following balances at March 31, 2017: Accounts receivable (2) Accounts payableExplanation / Answer
Green Landscaping
Green Landscaping Inc
Schedule of Expected Collections from Clients for each month in the first quarter of 2017 and for the quarter in total:
January
February
March
Total
November
$9,244
$9,244
December
$24,981
$8,327
$33,308
January
$62,214
$31,107
$10,369
$103,690
Februrary
$72,864
$36,432
$109,296
March
$80,646
$80,646
Total
$96,439
$112,298
$127,447
$336,184
Schedule of Expected Payments for Landscaping Supplies in the first quarter of 2017 and for the quarter in total:
January
February
March
Total
December
$6,508
$6,508
January
$9,162
$6,108
$15,270
February
$11,238
$7,492
$18,730
March
$12,960
$12,960
Total
$15,670
$17,346
$20,452
$53,468
10% of February sales - $121,440 x 10% = $12,144
40% of March sales -$134,410 x 40% = $53,764
Total accounts receivable balance at March 31, 2017 = $65,908
40% of March Purchases - $21,600 x 40% = $8,640
Total accounts payable balance at March 31, 2017 = $8,640
Accounts Receivable
$65,908
Accounts Payable
$8,640
Green Landscaping Inc
Schedule of Expected Collections from Clients for each month in the first quarter of 2017 and for the quarter in total:
January
February
March
Total
November
$9,244
$9,244
December
$24,981
$8,327
$33,308
January
$62,214
$31,107
$10,369
$103,690
Februrary
$72,864
$36,432
$109,296
March
$80,646
$80,646
Total
$96,439
$112,298
$127,447
$336,184
Schedule of Expected Payments for Landscaping Supplies in the first quarter of 2017 and for the quarter in total:
January
February
March
Total
December
$6,508
$6,508
January
$9,162
$6,108
$15,270
February
$11,238
$7,492
$18,730
March
$12,960
$12,960
Total
$15,670
$17,346
$20,452
$53,468
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