Paul’s Pool Service provides pool cleaning, chemical application, and pool repai
ID: 2436309 • Letter: P
Question
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 60 percent of their fees in the month the service is provided. In the month following service, Paul collects 35 percent of service fees. The final 5 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:
Explanation / Answer
Solution 1:
Solution 2:
Bugeted Cash receipts - Paul Pool Service Particulars June July August Total Collection for April sales $800.00 $800.00 Collection for May sales $7,700.00 $1,100.00 $8,800.00 Collection for June sales $14,400.00 $8,400.00 $1,200.00 $24,000.00 Collection for July sales $21,600.00 $12,600.00 $34,200.00 Collection for August sales $22,800.00 $22,800.00 Total Cash collection $22,900.00 $31,100.00 $36,600.00 $90,600.00