Green Landscaping Inc. is preparing its budget for the first quarter of 2017. Th
ID: 2561922 • 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 schedule of cash collections and a schedule of cash payments. The following information has been collected: All sales are on account and 60% is collected in the month of sale, 30% 1 month after the sale, and 10% two months after the sale. Actual sales revenues for November 2016 were $80,000 and December 2016 $90,000. Projected sales revenue for January 2017 $100,000, February 2017 $120,000, and March 2017 $140,000. Purchases of direct materials are made on account and 60% is paid in the month of purchase and 40% in the month following the purchase. Actual purchases of direct materials for December 2016 are $14,000. Projected purchases of direct materials for January 2017 $12,000, February 2017 $15,000, and March 2017 $18,000. Instructions
(a) Prepare a schedule of cash collections from sales by month for January, February, and March 2017.
(b) Determine the accounts receivable balance as of March 31, 2017.
(c) Prepare a schedule of cash payments for direct materials by month for January, February, and March 2017.
(d) Determine the accounts payable balance as of March 31, 2017.
Please do not leave anything out. Thank you
Explanation / Answer
a. Schedule of cash collections from sales
b. Accounts receivable balance as of March 31, 2017 = $56000
c. schedule of cash payments for direct materials
d. Accounts payable balance as of March 31, 2017 = $7200
Jan Feb Mar Collection from sale of month: November $8000 December 27000 $9000 January 60000 30000 10000 Feburary 72000 36000 Mar 84000 Total collection $95000 $111000 $130000Related Questions
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