Purchases of landscaping supplies direct materials are paid

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Reference no: EM13568026

Green Landscaping Inc. is preparing its budget for the first quarter of 2014. 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 provided, 30% the month after, and 10% the second month after receiving service.

Actual service revenue for 2013 and expected service revenues for 2014 are November 2013, $93,480; December 2013, $82,590; January 2014, $102,310; February 2014, $124,990; March 2014, $133,520.

Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2013 and expected purchases for 2014 are December 2013, $18,080; January 2014, $13,070; February 2014, $19,060; March 2014, $23,510.

(a) Prepare the following schedules for each month in the first quarter of 2014 and for the quarter in total:

(1) Expected collections from clients.

GREEN LANDSCAPING INC. Schedule of Expected Collections From Clients For the Quarter Ending March 31, 2014
	January	February	March	Quarter
November	$	$	$	$
December
January
February
March
Total collections	$	$	$	$

(2) Expected payments for landscaping supplies.

GREEN LANDSCAPING INC. Schedule of Expected Payments for Landscaping Supplies For the Quarter Ending March 31, 2014
	January	February	March	Quarter
December	$	$	$	$
January
February
March
Total payments	$	$	$	$

(b) Determine the following balances at March 31, 2014:

(1)		Accounts receivable		$
(2)		Accounts payable		$

Reference no: EM13568026

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