Solution-Determine the accounts receivable and accounts

Determine the accounts receivable and accounts payable

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Reference no: EM131732860

Problem - 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, $94,290; December 2016, $83,720; January 2017, $104,810; February 2017, $122,860; March 2017, $133,740.

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, $16,190; January 2017, $13,080; February 2017, $17,510; March 2017, $21,410.

(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.

(2) Expected payments for landscaping supplies.

(b) Determine the following balances at March 31, 2017:

Accounts receivable
Accounts payable

Reference no: EM131732860

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Determine the accounts receivable and accounts payable

Reference no: EM131732860

Reference no: EM131732860

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