Given the following information for Nester Company, answer the questions shown b
ID: 2394799 • Letter: G
Question
Given the following information for Nester Company, answer the questions shown below:
December
January
February
March
Sales
$500,000
$550,000
$450,000
$600,000
Purchases
$120,000
$140,000
$115,000
$150,000
Twenty percent of purchases are paid in cash at the time of purchase. The remaining balance is paid in the month following the purchase.
Monthly operating expenses are as follows:
Sales salaries
$10,000
Depreciation expense
$2,500
Property taxes
$2,000
paid at the end of each calendar quarter
Sales commissions
1.5%
paid in the month following the sale
Each question should have one amount in the answer field.
You must enter your answer in the following format: $x,xxx
Total cash payments for inventory purchases for the quarter ending March 31, 2018
Total cash payments for sales salaries for the quarter ending March 31, 2018
Total cash payments for property tax for the quarter ending March 31, 2018
Total cash cash payments for sales commissions for the quarter ending March 31, 2018
Total cash payments for depreciation for the quarter ending March 31, 2018
December
January
February
March
Sales
$500,000
$550,000
$450,000
$600,000
Purchases
$120,000
$140,000
$115,000
$150,000
Explanation / Answer
Part A
Total cash payments for inventory purchases for the quarter ending March 31, 2018
January = 140000*20% =28000
February = (115000*20%) +(120000*80%)= 119000
March = (150000*20%)+(140000*80%) =142000
Total cash payments for inventory purchases for the quarter ending March 31, 2018 = $289,000
Part B
Total cash payments for sales salaries for the quarter ending March 31, 2018
January = 10000
February = 10000
March = 10000
Total cash payments for sales salaries for the quarter ending March 31, 2018 = $30,000
Part C
Total cash payments for property tax for the quarter ending March 31, 2018 = $2,000
Part D
Total cash cash payments for sales commissions for the quarter ending March 31, 2018
January =500000*1.5% = 7500
February = 550000*1.5% =8250
March = 450000*1.5% = 6750
Total cash cash payments for sales commissions for the quarter ending March 31, 2018 = $22,500
Part E
Total cash payments for depreciation for the quarter ending March 31, 2018
January = 2,500
February = 2,500
March = 2,500
Total cash payments for depreciation for the quarter ending March 31, 2018 = $7,500
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