E9-18 Green Landscaping Inc. is preparing its budget for the rst quarter of 2014. 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 provided, 30% the month after, and 10% the second month after receiving service.

Actual service revenue for 2013 and expected service revenues for 2014 are November 2013, $80,000; December 2013, $90,000; January 2014, $100,000; February 2014, $120,000; March 2014, $140,000.

Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2013 and expected purchases for 2014 are December 2013, $14,000; January 2014, $12,000; February 2014, $15,000; March 2014, $18,000.

Instructions:

(a) Prepare the following schedules for each month in the rst quarter of 2014 and for the quarter in total: (1) Expected collections from clients. (2) Expected payments for landscaping supplies.

(b) Determine the following balances at March 31, 2014: (1) Accounts receivable. (2) Accounts payable