Purchases of landscaping supplies (direct materials) are paid 60% in the month o

Question

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, $17,070; January 2017, $17,550; February 2017, $19,240; March 2017, $23,770 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 Schedule of Expected Collections From Clients January February March Quarter November anuary February March Total coilections_5 (2) Expected payments for landscaping supplies GREEN NG INC. Schedule of Expected Paymente for L g Supplies January February March Total payments g Determine the following balances at March 31, 2017 (1) Accounts receivable (2) Accounts payable Googl

Explanation / Answer

Calculation of expected payments for landscaping supplies: Particulars January February March Quarter December (January=17070*0.40) 6828 0 0 6828 January (January=17550*0.6, February=17550*0.4) 10530 7020 0 17550 February (February=19240*0.6, March=19240*0.4) 0 11544 7696 19240 March (March=23770*0.6) 0 0 14262 14262 Total payments 17358 18564 21958 57880 Calculation of accounts payable at March 31,2017: Accounts payable=23770*0.40=$9508

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