E9-18 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 pay- ments 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 Novem- ber 2013, $80,000; December 2013, $90,000; January 2014, $100,000; February 2014,

$120,000; March 2014, $140,000.

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 pur- chases for 2014 are December 2013, $14,000; January 2014, $12,000; February 2014,

$15,000; March 2014, $18,000.

Instructions

(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.

(2)   Expected payments for landscaping supplies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(1)   Accounts receivable.

(2)   Accounts payable.