I need help with the following assignment because I have no idea where to start.
Environmental Landscaping Inc. is preparing its budget for the first quarter of 2008. 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 provided, 30% the month after, and 10% the second month after receiving service.
Actual service revenue for 2007 and expected service revenues for 2008 are: November 2007, $90,000; December 2007, $80,000; January 2008, $100,000; February 2008, $120,000; March 2008, $130,000.
Purchases on landscaping supplies (direct materials) are paid 40% in the month of purchase and 60% the following month. Actual purchases for 2007 and expected purchases for 2008 are: December 2007, $14,000; January 2008, $12,000; February 2008, $15,000; March 2008, $18,000.
Prepare the following schedules for each month in the first quarter of 2008 and for the quarter in total: (If answer is zero, please enter 0, do not leave any fields blank.)
(1) Expected collections from clients.
(2) Expected payments for landscaping supplies.
Determine the following balances at March 31, 2008:
Solution is provided in a separate excel file attached. It contains following ...
The following posting helps with problems involving expected collections and expected payments.