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Green Landscaping Inc. is preparing its budget for the first quarter of 2020. The next step is to prepare a cash receipts schedule and a
Green Landscaping Inc. is preparing its budget for the first quarter of 2020. The next step is to prepare a cash receipts schedule and a cash payments schedule. The following information has been collected:
1. | Clients usually pay 50% of their fee in the month when the service is provided, 40% the next month, and 10% in the second month after receiving the service. | ||
2. | Actual service revenues for 2019 and expected service revenues for 2020 are as follows: November 2019, $92,000; December 2019, $71,000; January 2020, $110,000; February 2020, $120,000; and March 2020, $133,000. | ||
3. | The company pays for purchases of landscaping supplies (direct materials) 60% in the month of purchase and 40% the following month. Actual purchases for 2019 and expected purchases for 2020 are: December 2019, $14,000; January 2020, $13,000; February 2020, $15,000; and March 2020, $21,000. |
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