Question

Green Landscaping Inc. is preparing its budget for the first quarter of 2020. 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 2019 and expected service revenues for 2020 are November 2019. $93,660; December 2019, $82,580; January 2020, $104,570; February 2020, $124.710; and March 2020, $133,440. Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2019 and expected purchases for 2020 are December 2019, $17,570; January 2020, $16,320; February 2020, $17,320; and March 2020, $22.350. (a) Prepare the following schedules for each month in the first quarter of 2020 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 $

Answer 1

	Determination of Expected Cash Collections :-
GREEN LANDSCAPING INC.
Schedule of Expected Collections From Clients
		January	February	March	Quarter
	November	$                                            9,366	$                                          -	$                               -	$                        9,366
	December	$                                          24,774	$                                    8,258	$                               -	$                      33,032
	January	$                                          62,742	$                                 31,371	$                      10,457	$                    104,570
	February	$                                                   -	$                                 74,826	$                      37,413	$                    112,239
	March	$                                                   -	$                                          -	$                      80,064	$                      80,064
	Total Collection	$                                          96,882	$                               114,455	$                   127,934	$                    339,271

		November 2019	December 2019	January 2020	February 2020	March 2020
	Actual/Expected Servie Revenues	$                                          93,660	$                                 82,580	$                   104,570	$                    124,710	$     133,440
	60% portion in the month of service performed	$                                          56,196	$                                  49,548	$                      62,742	$                      74,826	$       80,064
	30% portion in the month after receiving service	$                                          28,098	$                                  24,774	$                      31,371	$                      37,413	$       40,032
	10% portion in the second month after receiving service	$                                             9,366	$                                    8,258	$                      10,457	$                      12,471	$       13,344
	Collection of Receivables
	60% portion in the month of service performed	$                                          56,196	$                                  49,548	$                      62,742	$                      74,826	$       80,064
	30% portion in the month after receiving service		$                                  28,098	$                      24,774	$                      31,371	$       37,413
	10% portion in the second month after receiving service			$                        9,366	$                         8,258	$       10,457

	Determination of Expected Payment :-
GREEN LANDSCAPING INC.
Schedule of Expected Payments For Landscaping Supplies
		January	February	March	Quarter
	December	$                                            7,028	$                                          -	$                               -	$                        7,028
	January	$                                            9,792	$                                    6,528	$                               -	$                      16,320
	February	$                                                   -	$                                 10,392	$                        6,928	$                      17,320
	March	$                                                   -	$                                          -	$                      13,410	$                      13,410
	Total Payments	$                                          16,820	$                                 16,920	$                      20,338	$                      54,078
		December 2019	January 2020	February 2020	March 2020
	Actual/Expected Purchases	$                                          17,570	$                                 16,320	$                      17,320	$                      22,350
	60% portion in the month of Purchase	$                                          10,542	$                                    9,792	$                      10,392	$                      13,410
	40% portion in the following month	$                                             7,028	$                                    6,528	$                        6,928	$                         8,940
	Expected Payments
	60% portion in the month of Purchase	$                                          10,542	$                                    9,792	$                      10,392	$                      13,410
	40% portion in the following month		$                                    7,028	$                        6,528	$                         6,928
	Accounts Receivable at March 31, 2020	12471+40032+13344	$                                  65,847
	Accounts Payable at March 31, 2020		$                                    8,940

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Thank you.