ring its bu the first qu of 2022. The next step is to prepare a cash receipts schedule and a cash payments schedule. The following information has been collected: 1. Clients usually pay 50% of their fee in the month when the service is provided, 40% the next month, and 10% in the second month after receiving the service. 2. Actual service revenues for 2021 and expected service revenues for 2022 are as follows: November 2021, $90,000; December 2021, $70,000; January 2022, $110,000; February 2022, $120,000; and March 2022, $130,000. 3. The company pays for purchases of landscaping supplies (direct materials) 60% in the month of purchase and 40% the following month. Actual purchases for 2021 and expected purchases for 2022 are: December 2021, $14,000; January 2022, $13,000; February 2022, $15,000; and March 2022, $20,000. Instructions a. Prepare the following schedules for each month in the first quarter of 2022 and for the quarter in total: (1) expected collections from clients, and (2) expected payments for landscaping supplies. b. Determine the following balances at March 31, 2022: (1) accounts receivable, and (2) accounts payable.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Prepare schedules for cash receipts and cash payments, and determine the ending balances for the
relevant balance sheet accounts.
E10.30 (LO 4, 5) Service Environmental Landscaping Inc. is preparing its budget for the first quarter
of 2022. The next step is to prepare a cash receipts schedule and a cash payments schedule. The following
information has been collected:
1. Clients usually pay 50% of their fee in the month when the service is provided, 40% the next month,
and 10% in the second month after receiving the service.
2. Actual service revenues for 2021 and expected service revenues for 2022 are as follows: November
2021, $90,000; December 2021, $70,000; January 2022, $110,000; February 2022, $120,000; and
March 2022, $130,000.
3. The company pays for purchases of landscaping supplies (direct materials) 60% in the month of
purchase and 40% the following month. Actual purchases for 2021 and expected purchases for 2022
are: December 2021, $14,000; January 2022, $13,000; February 2022, $15,000; and March 2022,
$20,000.
Instructions
a. Prepare the following schedules for each month in the first quarter of 2022 and for the quarter in total:
(1) expected collections from clients, and (2) expected payments for landscaping supplies.
b. Determine the following balances at March 31, 2022: (1) accounts receivable, and (2) accounts payable.
Transcribed Image Text:Prepare schedules for cash receipts and cash payments, and determine the ending balances for the relevant balance sheet accounts. E10.30 (LO 4, 5) Service Environmental Landscaping Inc. is preparing its budget for the first quarter of 2022. The next step is to prepare a cash receipts schedule and a cash payments schedule. The following information has been collected: 1. Clients usually pay 50% of their fee in the month when the service is provided, 40% the next month, and 10% in the second month after receiving the service. 2. Actual service revenues for 2021 and expected service revenues for 2022 are as follows: November 2021, $90,000; December 2021, $70,000; January 2022, $110,000; February 2022, $120,000; and March 2022, $130,000. 3. The company pays for purchases of landscaping supplies (direct materials) 60% in the month of purchase and 40% the following month. Actual purchases for 2021 and expected purchases for 2022 are: December 2021, $14,000; January 2022, $13,000; February 2022, $15,000; and March 2022, $20,000. Instructions a. Prepare the following schedules for each month in the first quarter of 2022 and for the quarter in total: (1) expected collections from clients, and (2) expected payments for landscaping supplies. b. Determine the following balances at March 31, 2022: (1) accounts receivable, and (2) accounts payable.
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