Sunland Landscaping Inc. is preparing its budget for the first quarter of 2020. 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 performed, 30% the month after, and 10% the second month after receiving service. Actual service revenue for 2019 and expected service revenues for 2020 are November 2019, $93,620; December 2019, $83,630; January 2020, $102,120; February 2020, $123,950; and March 2020, $133,630. Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2019 and expected purchases for 2020 are December 2019, $16,410; January 2020, $13,540; February 2020, $18,970; and March 2020, $23,150. (a) Prepare the following schedules for each month in the first quarter of 2020 and for the quarter in total: (1) Expected collections from clients. SUNLAND LANDSCAPING INC. Schedule of Expected Collections From Clients January February March Quarter November $ $ $ $ December January February March Total collections $ $ $ $ (2) Expected payments for landscaping supplies. SUNLAND LANDSCAPING INC. Schedule of Expected Payments for Landscaping Supplies January February March Quarter December $ $ $ $ January February March Total payments $ $ $ $ (b) Determine the following balances at March 31, 2020: (1) Accounts receivable $ (2) Accounts payable $
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Sunland Landscaping Inc. is preparing its budget for the first quarter of 2020. 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 performed, 30% the month after, and 10% the second month after receiving service.
Actual service revenue for 2019 and expected service revenues for 2020 are November 2019, $93,620; December 2019, $83,630; January 2020, $102,120; February 2020, $123,950; and March 2020, $133,630.
Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2019 and expected purchases for 2020 are December 2019, $16,410; January 2020, $13,540; February 2020, $18,970; and March 2020, $23,150.
(a)
Prepare the following schedules for each month in the first quarter of 2020 and for the quarter in total:
(1) Expected collections from clients.
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SUNLAND LANDSCAPING INC.
Schedule of Expected Collections From Clients |
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January
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February
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March
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Quarter
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November
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$
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$
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$
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$
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December
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January
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February
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March
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Total collections
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$
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$
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$
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$
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(2) Expected payments for landscaping supplies.
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SUNLAND LANDSCAPING INC.
Schedule of Expected Payments for Landscaping Supplies |
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January
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February
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March
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Quarter
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December
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$
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$
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$
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$
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January
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February
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March
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Total payments
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$
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$
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$
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$
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(b)
Determine the following balances at March 31, 2020:
| (1) | Accounts receivable |
$
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| (2) | Accounts payable |
$
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