Schedule of Cash Payments for a Service Company Horizon Financial Inc. was organ
ID: 2425814 • Letter: S
Question
Schedule of Cash Payments for a Service Company
Horizon Financial Inc. was organized on February 28, 2016. Projected selling and administrative expenses for each of the first three months of operations are as follows:
Depreciation, insurance, and property taxes represent $9,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. Seventy percent of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.
Prepare a schedule indicating cash payments for selling and administrative expenses for March, April, and May. Enter all amounts as positive numbers.
Feedback:
Please provide a detailed solution for each month. Thanks.
March $52,400 April 64,200 May 68,900Explanation / Answer
Solution :
Schedule of Cash Payments for Selling and Administrative Expenses
March
April
May
March expenses:
Paid in March (43400*70%)
30380
Paid in April (43400*30%)
13020
April expenses:
Paid in April (55200*70%)
38640
Paid in May (55200*30%)
16560
May expenses:
Paid in May (59900*70%)
41930
Total cash payments
30380
51660
58490
total expense
dep/insurance/property tax
Remaining expense
March
52400
9000
43400
April
64200
9000
55200
May
68900
9000
59900
Schedule of Cash Payments for Selling and Administrative Expenses
March
April
May
March expenses:
Paid in March (43400*70%)
30380
Paid in April (43400*30%)
13020
April expenses:
Paid in April (55200*70%)
38640
Paid in May (55200*30%)
16560
May expenses:
Paid in May (59900*70%)
41930
Total cash payments
30380
51660
58490
total expense
dep/insurance/property tax
Remaining expense
March
52400
9000
43400
April
64200
9000
55200
May
68900
9000
59900
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