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
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, $80,000; December 2016, $90,000; January 2017, $100,000; February 2017, $120,000; March 2017, $140,000.
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, $14,000; January 2017, $12,000; February 2017, $15,000; March 2017, $18,000.
(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.
GREEN LANDSCAPING INC. | ||||||||
January | February | March | Quarter | |||||
November | $ | $ | $ | $ | ||||
December | ||||||||
January | ||||||||
February | ||||||||
March | ||||||||
Total collections | $ | $ | $ | $ | ||||
(2) Expected payments for landscaping supplies.
GREEN LANDSCAPING INC. | ||||||||
January | February | March | Quarter | |||||
December | $ | $ | $ | $ | ||||
January | ||||||||
February | ||||||||
March | ||||||||
Total payments | $ | $ | $ | $ | ||||
(b)
Determine the following balances at March 31, 2017:
(1) | Accounts receivable | $ | ||
(2) | Accounts payable | $ |
10 years ago
Purchase the answer to view it
exercise_9_ans.docx
