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.

Answer 1

Schedule of expected collection from clients

For the quarter ended March 31,2020

	January	February	March	Quarter
November	9366			9366
December	24774	8258		33032
January	62742	31371	10457	104570
February		74826	37413	112239
March			80064	80064
Total collection	96882	114455	127934	339271