Question
Exercise 9-18 Green Landscaping Inc. is preparing its budget for the first quarter of 2017. The next step in the budgeting process is to prepare
Exercise 9-18 Green Landscaping Inc. is preparing its budget for the first quarter of 2017. 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 performed, 30% the month after, and 10% the second month after receiving service. Actual service revenue for 2016 and expected service revenues for 2017 are November 2016, $93,200; December 2016, $84,640; January 2017, $104,020; February 2017, $122,030; March 2017, $132,570.
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, $15,800; January 2017, $13,490; February 2017, $17,080; March 2017, $23,050.
(a) Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total:
(1) Expected collections from clients.
(1) Expected collections from clients GREEN LANDSCAPING INC. Schedule of Expected Collections From Clients January February March Quarter November December January February March Total collections s (2) Expected payments for landscaping supplies GREEN LANDSCAPING INC. Schedule of Expected Payments for Landscaping Supplies January February March Quarter December January February March Total payments
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