Question

Blue 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, $92,930; December 2016, $81,950; January 2017, $102,750; February 2017, $124,450; March 2017, $134,080.

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, $16,880; January 2017, $16,090; February 2017, $19,480; March 2017, $23,120.

Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total: (1) Expected collections from clients. BLUE LANDSCAPING INC. Schedule of Expected Collections From Clients January February March Quarter November December January February March Total collections (2) Expected payments for landscaping supplies. BLUE LANDSCAPING INC. Schedule of Expected Payments for Landscaping Supplies January February March Quarter December January February March Total payments

Answer 1

Answer-1)-

BLUE LANDESCAPING INC.
SCHEDULE OF EXPECTED COLLECTIONS FROM CIENTS
FOR THE FIRST QUARTER OF 2017
PARTICULARS	JANUARY	FEBRUARY	MARCH	QUARTER
	$	$	$	$
November	$92930*10%= $9293			9293
December	$81950*30%= $24585	$81950*10%= $8195		32780
January	$102750*60%= $61650	$102750*30%= $30825	$102750*10%= $10275	102750
Febuary		$124450*60%= $74670	$124450*30%= $37335	112005
March			$134080*60%= $80448	80448
Total collections $	95528	113690	128058	337276

2)-

BLUE LANDESCAPING INC.
SCHEDULE OF EXPECTED PAYMENTS FOR LANDSCAPING SUPPLIES
FOR THE FIRST QUARTER OF 2017
PARTICULARS	JANUARY	FEBRUARY	MARCH	QUARTER
	$	$	$	$
December	$16880*40%= $6752			6752
January	$16090*60%= $9654	$16090*40%= $6436		16090
Febuary		$19480*60%= $11688	$19480*40%= $7792	19480
March			$23120*60%= $13872	13872
Total payments $	16406	18124	21664	56194