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 50 percent of their fees in the month the service is provided. In the month following service, Pau collects 40 percent of service fees. The final 10 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: . June 1 cash balance $16,000. ⚫ June 1 supplies on hand $4,400. June 1 accounts receivable $9,100. ⚫ June 1 accounts payable $4,300. ⚫ Estimated sales for June, July, and August are $27,300, $41,000, and $43,900, respectively. . Sales during May were $25,700, and sales during April were $18,300. ⚫ Estimated purchases for June, July, and August are $10,000, $19,200, and $13,800, respectively. • Purchases in May were $5,500. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts:
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 50 percent of their fees in the month the service is provided. In the month following service, Pau collects 40 percent of service fees. The final 10 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: . June 1 cash balance $16,000. ⚫ June 1 supplies on hand $4,400. June 1 accounts receivable $9,100. ⚫ June 1 accounts payable $4,300. ⚫ Estimated sales for June, July, and August are $27,300, $41,000, and $43,900, respectively. . Sales during May were $25,700, and sales during April were $18,300. ⚫ Estimated purchases for June, July, and August are $10,000, $19,200, and $13,800, respectively. • Purchases in May were $5,500. Required: 1. Compute budgeted cash receipts and budgeted cash payments for each month. 2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 50 percent of their fees in the month the service is provided. In the month following service, Paul
collects 40 percent of service fees. The final 10 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:
⚫ June 1 cash balance $16,000.
⚫ June 1 supplies on hand $4,400.
⚫ June 1 accounts receivable $9,100.
•
June 1 accounts payable $4,300.
• Estimated sales for June, July, and August are $27,300, $41,000, and $43,900, respectively.
Sales during May were $25,700, and sales during April were $18,300.
. Estimated purchases for June, July, and August are $10,000, $19,200, and $13,800, respectively.
.
Purchases in May were $5,500.
Required:
1. Compute budgeted cash receipts and budgeted cash payments for each month.
2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts:
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts:
Cash
Balances for August 31 Budgeted Balance Sheet
June 1 Balance
Add: Total Cash Receipts
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