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it, and pays 50 p s Paul purchases

it, and pays 50 p s Paul purchases

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 40 percent of their fees in the month the service is provided, In the month following service, Paul collects 50 percent of service fees. The final 10 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, 85 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 $14,800. • June 1 supplies on hand $4,000. • June 1 accounts receivable $8,300. • June 1 accounts payable $3,900. · Estimated sales for June, July, and August are $24,900, $37,400, and $39,900, respectively. • Sales during May were $23,300, and sales during April were $16,700. · Estimated purchases for June, July, and August are $9,200, $17,600, and $12,600, respectively. • Purchases in May were $5,100. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute budgeted cash receipts and bådgeted cash payments for each month. June July August Budgeted Cash Receipts Budoeted Cash Pavments
Transcribed Image Text: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 40 percent of their fees in the month the service is provided, In the month following service, Paul collects 50 percent of service fees. The final 10 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, 85 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 $14,800. • June 1 supplies on hand $4,000. • June 1 accounts receivable $8,300. • June 1 accounts payable $3,900. · Estimated sales for June, July, and August are $24,900, $37,400, and $39,900, respectively. • Sales during May were $23,300, and sales during April were $16,700. · Estimated purchases for June, July, and August are $9,200, $17,600, and $12,600, respectively. • Purchases in May were $5,100. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute budgeted cash receipts and bådgeted cash payments for each month. June July August Budgeted Cash Receipts Budoeted Cash Pavments
Required 1 Required 2 Compute the balances necessary to prepare a budgeted balance sheet for Augu Balances for August 31 Budgeted Balance Sheet Cash June 1 Balance Add: Total Cash Receipts Less: Total Cash Payments August 31 Balance Supplies Inventory 15% of August Purchases Accounts Receivable 60% of August Sales 10% of July Sales Balance at August 31 Accounts Payable 50% of August Purchases < Required 1 Required 2
Transcribed Image Text:Required 1 Required 2 Compute the balances necessary to prepare a budgeted balance sheet for Augu Balances for August 31 Budgeted Balance Sheet Cash June 1 Balance Add: Total Cash Receipts Less: Total Cash Payments August 31 Balance Supplies Inventory 15% of August Purchases Accounts Receivable 60% of August Sales 10% of July Sales Balance at August 31 Accounts Payable 50% of August Purchases < Required 1 Required 2
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