E23-2 mediu mates 120 he Prepare schedules for cash E23-18 Green Landscaping Inc
ID: 2572754 • Letter: E
Question
E23-2 mediu mates 120 he Prepare schedules for cash E23-18 Green Landscaping Inc. is preparing its budget for the first quae receipts and cash payments, ext step in the budgeting process is to prepare a cash receipts schedule ar of 2017, and determine ending and ments schedule. To that end the following information has been collected a cash balances for balance sheet Clients usually pay 60% of their fee in the month that service is perfo Instra Prep (LO 4) month after, and 10% the second month after receiving service. Actual service revenue for 2016 and expected service revenues for 201z 2016, $80,000; December 2016, $90,000; January 2017, $100,000: Feh re N : Febru $120,000; and March 2017, $140,000. ary 2017 Purchases of landscaping supplies (direct materials) are paid 60% in purchase and 40% the following month. Actual purchases for 2016 and ue month d chases for 2017 are December 2016, $14,000; January 2017, $12,000: Fehed pu February 2 Pur. 2017 $15,000; and March 2017, $18,000. Instructions (a) Prepare the following schedules for each month in the first quarter of 2017 quarter in total: (1) Expected collections from clients. (2) Expected payments for landscaping supplies. 923 foll (b) Determine the following balances at March 31, 2017 2. (1) Accounts receivable (2) Accounts payable.Explanation / Answer
Green Landscaping Inc
Statement of Expected Collections from Clients for each month in the first quarter of 2017 and for the quarter in total:
January
February
March
Total
November
$8,000
$8,000
December
$27,000
$9,000
$36,000
January
$60,000
$30,000
$10,000
$100,000
February
$72,000
$36,000
$108,000
March
$84,000
$84,000
Total Collections
$95,000
$111,000
$130,000
$336,000
Statement of Expected Payments for Landscaping Supplies in the first quarter of 2017 and for the quarter in total:
January
February
March
Total
December
$5,600
$5,600
January
$7,200
$4,800
$12,000
February
$9,000
$6,000
$15,000
March
$10,800
$10,800
Total
$12,800
$13,800
$16,800
$43,400
10% of February sales - $120,000 x 10% = $12,000
40% of March sales - $140,000 x 40% = $56,000
Total accounts receivable balance at March 31, 2017 = $68,000
40% of March Purchases - $18,000 x 40% = $7,200
Total accounts payable balance at March 31, 2017 = $7,200
Statement of Expected Collections from Clients for each month in the first quarter of 2017 and for the quarter in total:
January
February
March
Total
November
$8,000
$8,000
December
$27,000
$9,000
$36,000
January
$60,000
$30,000
$10,000
$100,000
February
$72,000
$36,000
$108,000
March
$84,000
$84,000
Total Collections
$95,000
$111,000
$130,000
$336,000
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