Question

Paul's Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are billed weekly for services provided and usually pay 60 percent of their fees in the month the service is provided. In the month following service, Paul collects 35 percent of service fees. The final 5 percent is collected in the second month following service. Paul purchases his supplies on credit, and pays 50 percent in the month of purchase and the remaining 50 percent in the month following purchase. Of the supplies Paul purchases, 80 percent is used in the month of purchase, and the remainder is used in the month following purchase. The following information is available for the months of June, July, and August, which are Paul's busiest months: • June 1 cash balance 516,100. • June 1 supplies on hand $1,080. • June 1 accounts receivable $10,385. • June 1 accounts payable $2.700. • Estimated sales for June, July, and August are $25,900, S38,900, and $41,100, respectively. • Sales during May were $23,800, and sales during April were $17,300. • Estimated purchases for June, July, and August are 59,700. $18,300, and $12.900, respectively. • Purchases in May were $5,400. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. June July August Budgeted Cash Receipts Budgeted Cash Payments 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts: Balances for August 31 Budgeted Balance Sheet Cash June 1 Balance Add: Total Cash Receipts Less: Total Cash Payments August 31 Balance Supplies Inventory 20% of August Purchases Accounts Receivable 40% of August Sales 5% of July Sales Balance at August 31 Accounts Payable 50% of August Purchases

Answer 1

Budgeted Cash receipts			in $
	June	July	Aug	Total
From Accounts receivable	9195	1190
	(17300*5%)+(23800*35%)	(23800*5%)
From June sales	15540	9065	1295
	(25900*60%)	(25900*35%)	(25900*5%)
From July sales		23340	13615
		(38900*60%)	(38900*35%)
From August sales			24660
			(41100*60%)
Budgeted Cash receipts	24735	33595	39570	97900
Budgetd cash payments	June	July	Aug
For accounts payable	2700
For June purchases	4850	4850
	(9700*50%)
For July purchases		9150	9150
		(18300*50%)
For Agust purchases			6450
			(12900*50%)
Budgetd cash payments	7550	14000	15600	37150
ans 2
Balance for August 31
Budgeted Balance sheet
Cash
June 1 Balance	$16,100
Add: Total cash receipts	97900
Less: Total cash payments	37150
August 31 Bal	$76,850
Supplies iNventory
20% of August purchases	2580	12900*20%
Accounts receivable
40% of August sales	16440	41100*40%
5% of July sales	1945
Balance for August 31	18385
Accounts payable
50% of August purchases	6450
If any doubt please comment