(THE ANSWERS INPUTED WERE FROM ME AND ARE WRONG) If you could show the steps tha
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(THE ANSWERS INPUTED WERE FROM ME AND ARE WRONG)
If you could show the steps that'd be great im really lost
Paul’s Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are billed weekly for services provided and usually pay 60 percent of their fees in the month the service is provided. In the month following service, Paul collects 35 percent of service fees. The final 5 percent is collected in the second month following service. Paul purchases his supplies on credit, and pays 50 percent in the month of purchase and the remaining 50 percent in the month following purchase. Of the supplies Paul purchases, 85 percent is used in the month of purchase, and the remainder is used in the month following purchase. The following information is available for the months of June, July, and August, which are Paul’s busiest months: June 1 cash balance $14,600. June 1 supplies on hand $3,800. June 1 accounts receivable $8,000. June 1 accounts payable $3,700. Estimated sales for June, July, and August are $24,000, $36,000, and $38,000, respectively. Sales during May were $22,000, and sales during April were $16,000. Estimated purchases for June, July, and August are $9,000, $17,000, and $12,000, respectively. Purchases in May were $5,000.
Required 1. Compute budgeted cash receipts and budgeted cash payments for each month June July August Budgeted Cash Receipts56,50045,50 Budgeted Cash Payments$ 51,800 7,000$ 13,000$ 14,500 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts Balances for August 31 Budgeted Cash June 1 Balance Add: Total Cash Receipts Less: Total Cash Payments August 31 Balance Supplies Inventory 15% of August Purchases $ 2,550 Accounts Receivable 40% of August Sales 5% of July Sales Balance at August 31 Accounts Payable 50% of August Purchases $ 16,700 Balance Sheet $14,600 51,800 14,500 $37,300 $15,200 13,900 29,100Explanation / Answer
Budgeted cash budgeted cash receipts and cash payments:
a. Current month @60%
$14,400
[$24,000 x 60%]
$21,600
[$36,000 x 60%]
$22,800
[$38,000 x 60%]
b. Previous month @35%
$7,700
[$22,000 x 35%]
$8,400
[$24,000 x 35%]
$12,600
[$36,000 x 35%]
c. Month previous to previous month @5%
$800
[$16,000 x 5%]
$1,100
[$22,000 x 5%]
$1,200
[$24,000 x 5%]
$4,500
[$9,000 x 50%]
$8,500
[$17,000 x 50%]
$6,000
[$12,000 x 50%]
$2,500
[$5,000 x 50%]
$4,500
[$9,000 x 50%]
$8,500
[$17,000 x 50%]
2. Calculation of balances necessary to prepare Budget balance sheet on August 31:
ADD: Total Cash receipts (received In June, July, August)
[$22,900 + $31,100 + $36,600]
LESS: Total Cash payments (made in June, July, August)
[$7,000 + $13,000 + $14,500]
ADD: 5% of July Sales [$36,000 x 5%]
April May June July August Sales $16,000 $22,000 $24,000 $36,000 $36,000 Budgeted cash receipts from the sales made in thea. Current month @60%
$14,400
[$24,000 x 60%]
$21,600
[$36,000 x 60%]
$22,800
[$38,000 x 60%]
b. Previous month @35%
$7,700
[$22,000 x 35%]
$8,400
[$24,000 x 35%]
$12,600
[$36,000 x 35%]
c. Month previous to previous month @5%
$800
[$16,000 x 5%]
$1,100
[$22,000 x 5%]
$1,200
[$24,000 x 5%]
Total Budgeted cash receipts (a + b + c) $22,900 $31,100 $36,600 Purchases $5,000 $9,000 $17,000 $12,000 Budgeted Cash Payments for purchases made in the a. Current month @50%$4,500
[$9,000 x 50%]
$8,500
[$17,000 x 50%]
$6,000
[$12,000 x 50%]
b. Previous month @50%$2,500
[$5,000 x 50%]
$4,500
[$9,000 x 50%]
$8,500
[$17,000 x 50%]
Total Budgeted Cash Payments (a + b) $7,000 $13,000 $14,500Related Questions
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