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 cash
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, $93,620; December 2016, $83,630; January 2017, $102,120; February 2017, $123,950; March 2017, $133,630. 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, $16,410; January 2017, $13,540; February 2017, $18,970; March 2017, $23,150. (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. GREEN LANDSCAPING INC Schedule of Expected Collections From Clients January February March Quarter November December January February March Total collections s
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