Green Landscaping Inc. is preparing its budget for the first quarter of 2017. Th
ID: 2449551 • 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, $93,810; December 2016, $82,420; January 2017, $104,400; February 2017, $123,260; March 2017, $133,090.
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, $19,310; January 2017, $17,400; February 2017, $16,340; March 2017, $19,470.
(a)
Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total:
(1) Expected collections from clients.
January
February
March
Quarter
(2) Expected payments for landscaping supplies.
January
February
March
Quarter
(b)
Determine the following balances at March 31, 2017:
GREEN LANDSCAPING INC.
Schedule of Expected Collections From Clients
For the Quarter Ending March 31, 2017March 31, 2017For the Year Ending March 31, 2017
January
February
March
Quarter
November$
$
$
$
December January February March Total collections$
$
$
$
Explanation / Answer
EXPECTED CASH COLLECTIONS Jan Feb March QUARTER November 9,381 9,381 December 24,726 8242 32,968 January 62640 31320 10440 104,400 February 73,956 36,978 110,934 March 79854 79,854 Total Cash Collections 96,747 113,518 127,272 337,537 EXPECTED CASH PAYMENTS Jan Feb March Quarter December 7,724 7,724 January 10440 6960 17,400 February 9804 6536 16,340 March 11682 11,682 Total Cash disbursement 18,164 16,764 18,218 53,146 Req b: Balance of Accounts receivable: Feb Sales (123260*10%) 12326 March Sales (133090*40%) 53236 Total Accounts receivable 65562 Balance of Accounts payable: March Purchases (19470*40%) 7788 Total Accounts payable 7788
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