Paul\'s Pool Service provides pool cleaning, chemical application, and pool repa
ID: 2513280 • 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 the month following service, Paul collects 15 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 80 percent of their fees in the month the service is provided. In The following information is available for the months of June, July, and August, which are Paul's busiest months: June 1 cash balance $15,800 June 1 supplies on hand $4,200 June 1 accounts receivable $8,800 . June 1 accounts payable $4,100 Estimated sales for June, July, and August are $26,400, $39,600, and $42,000, respectively Sales during May were $24,400, and sales during April were $17,600 Estimated purchases for June, July, and August are $9,800, $18,600, and $13,200, respectively Purchases in May were $5,400 Required 1. Compute budgeted cash receipts and budgeted cash payments for each month June July August Budgeted Cash Receipts Budgeted Cash Payments 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts: alances for August 31 Budgeted Balance Sheet Cash June 1 Balance Add: Total Cash Receipts Less: Total Cash Payments August 31 Balance Supplies Inventory 15% of August Purchases Accounts Receivable 20% of August sales 5% of July sales Balance at August 31 Accounts Payable 50% of August PurchasesExplanation / Answer
EXPECTED CASH COLLECTIONS June July Aug Total April sales collected 880 880 May Sales collected 3,660 1220 4,880 June Month sales 21120 3960 1320 26,400 July month sales 31,680 5,940 37,620 Aug month sales 33600 33,600 Total Cash Collections 25,660 36,860 40,860 103,380 EXPECTED CASH PAYMENTS June July Aug Total May month purchases 2,700 2,700 June Month Purchases 4900 4900 9,800 July month purchases 9300 9300 18,600 Aug month purchases 6600 6,600 Total Cash disbursement 7,600 14,200 15,900 37,700 Balances on Aug 31 Cash Jun1 balance 15800 Add: Receipts 103380 Less: payment 37700 Aug 31 balance 81480 Supplies: 15% of Aug purchases 1980 Accounts receivable: 20% of Aug Sales 8400 5% of July sales 1980 balance at Aug 31 10380 Accounts payable: 50% of Aug purchases 6600