Paul\'s Pool Service provides pool cleaning, chemical application, and pool repa
ID: 2513169 • Letter: P
Question
Paul's Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are biled 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 folowing 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 Paurs busiest months June 1 cash balance $15,700. June 1 supplies on hand $4,300 June 1 accounts receivable $8,900 June 1 accounts payable $4,200. Estimated sales for June, July, and August are $26,700, $40,100, and $42,900, respectively Sales during May were $25,100, and sales during April were $17,900 . . Estimated purchases for June, July, and August are $9,800, $18,800, and $13,500, respectively. Purchases in May were $5,400. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. Cash Recepts Budgeted Cash Payments 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts Cash June 1 Balance Total Cash Recepts ess Total Cash Payments August 31 Balance Supplies Inventory 30% of August Purchases Accounts Receivable 40% of August Sales % of July Sales Balance at August 31 Accounts Payable 50% of August PurchasesExplanation / Answer
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June July August Budgeted Cash Receipts (26700*60%)+(25100*35%)+(17900*5%) = $25700 (40100*60%)+(26700*35%)+(25100*5%) = $34660 (42900*60%)+(40100*35%)+(26700*5%) = $41110 Budgeted Cash Payments (9800*50%)+(5400*50%)=$7600 (18800*50)+(9800*50%) = $14300 (13500*50%)+(18800*50%) = $16150