Exercise 9-18 Green Landscaping Inc is preparing its budget for the first quarte

Question

Exercise 9-18 Green Landscaping Inc is preparing its budget for the first quarter of 2017. The next step in the budgeting process i to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected clients usualy pay 60% of their fee in the month that service is performed, 30% the month after, ard 10% the second month after receiving service. Actual service revenue for 2016 and expected service revenues for 2017 are November 2016, $93,590; December 2016, $82,600; anuary 2017, 5104,410;Februsry 2017, $122,350; March 2017, $134,050 Pu chases of land cap ng supplies direct mate als are paid 60% n the month of pu chase and 40% the following month. Actual p chases for 2016 and expected pu chases for 2017 are December 2016, $18,580 Ja uary 2017, s13,310 February 2017 517 650; March 2017, $20,140, Prepare the following schedules for esch month in the first quarter of 2017 and for the quarter in total: (1) Expected collections from dients GREEN LANDSCAPING INC. Schedule of Expetded Collections From Chents Februa rYNarch anuary Februan March Total col lections (2) Expected psyments for landsceping supplies Schedule of Fxpected Payments for Landccaping Supplies January February March Total Determine the following balances at March 31, 2017: (1) Acnts (2) Accounts payable receivable

Explanation / Answer

EXPECTED CASH COLLECTIONS Jan Feb mar QUARTER Nov Month revenue 9,359 9,359 Dec Month Revenue 24,780 8260 33,040 Jan month Revenue 62646 31323 10441 104,410 Feb month Revenue 73,416 36,708 110,124 March month revenue 80430 80,430 Total Cash Collections 96,785 112,999 127,579 337,363 EXPECTED CASH PAYMENTS Jan Feb Mar Quarter Dec month pruchase 7,432 7,432 jan month purchase 7986 5324 13,310 Feb month Purchase 10590 7060 17,650 March month purchase 12084 12,084 Total Cash disbursement 15,418 15,914 19,144 50,476 Accounts receivable balance: Feb month revenue (122360*10%) 12236 March month revenue (134050*40%) 53620 Total Accounts reeivable 65856 Accounts payable balance: March month Purchhase (20140*40%) 8056 Total Accounts payable 8056

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