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, $93,620; December 2013, $82,750; January 2014, $101,940; February 2014, $123,140; March 2014, $133,850.
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, $18,140; January 2014, $17,690; February 2014, $17,480; March 2014, $23,070.
(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.
(2) Expected payments for landscaping supplies.
(b) Determine the following balances at March 31, 2014:
| (1) | | Accounts receivable | | $  [removed] |
| (2) | | Accounts payable | | $ [removed] |
Cclegg00
10 years ago
3
green_landscaping_inc._budget.xlsx
