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, 70 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 $16,700. • June 1 supplies on hand $4,500. • June 1 accounts receivable $9,400. • June accounts payable $4,400. • Estimated sales for June, July, and August are $28,200, $42,300, and $45,000, respectively. • Sales during May were $26,200, and sales during April were $18,800. • Estimated purchases for June, July, and August are $10,400, $19,800, and $14,100, respectively. • Purchases in May were $5,700. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. Budgeted Cash Receipts Budgeted Cash Payments June July August
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, 70 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 $16,700. • June 1 supplies on hand $4,500. • June 1 accounts receivable $9,400. • June accounts payable $4,400. • Estimated sales for June, July, and August are $28,200, $42,300, and $45,000, respectively. • Sales during May were $26,200, and sales during April were $18,800. • Estimated purchases for June, July, and August are $10,400, $19,800, and $14,100, respectively. • Purchases in May were $5,700. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. Budgeted Cash Receipts Budgeted Cash Payments June July August
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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, 70 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 $16,700.
June 1 supplies on hand $4,500.
• June 1 accounts receivable $9,400.
• June 1 accounts payable $4,400.
• Estimated sales for June, July, and August are $28,200, $42,300, and $45,000, respectively.
Sales during May were $26,200, and sales during April were $18,800.
• Estimated purchases for June, July, and August are $10,400, $19,800, and $14,100, respectively.
• Purchases in May were $5,700.
Required:
1. Compute budgeted cash receipts and budgeted cash payments for each month.
Budgeted Cash Receipts
Budgeted Cash Payments
June
July
August
Transcribed Image Text: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
30% of August Purchases
Accounts Receivable
60% of August Sales
10% of July Sales
Balance at August 31
Accounts Payable
50% of August Purchases
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