Question 1.)

a.) You decide to earn some money during the summer by running a lawn mowing service called Blade for Blade, Inc. You plan to work 179 hours per month.You will charge customers $20 per hour and 10% of your customers will pay you in cash and the rest of your customers will pay you in the following month. How much should your estimated accounts receivable balance equal on your balance sheet at the end of the month?

b.)You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 240 hours in your first month and 290 hours in your second month of business. You charge your customers $24 per hour. You plan on collecting 90% of your sales in the month you mow the lawn and the remainder in the following month. Calculate the amount of cash collections in your second month of business.