Schedule of Cash Payments Excel Learning Systems Inc. was organized on September

Question

Schedule of Cash Payments

Excel Learning Systems Inc. was organized on September 30, 2016. Projected selling and administrative expenses for each of the first three months of operations are as follows:

Depreciation, insurance, and property taxes represent $32,000 of the estimated monthly expenses. The annual insurance premium was paid on September 30, and property taxes for the year will be paid in June. The company expects that 61% of the remainder of the expenses will 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 October, November, and December.

Explanation / Answer

Excel Learning Systems Inc. Schedule of Cash Payments for Selling and Administrative Expenses For the Three Months Ending December 31, 2016 October November December October expenses: Paid in October 71797 0 0 Paid in November 0 45903 0 November expenses: Paid in November 65392 0 0 Paid in December 0 41808 0 December expenses: Paid in December 0 57767 Total cash payments 137189 87711 57767 282667 The expenses to be paid in cash during October, November and Decemberfor each of the months is: October = 149700-32000 = 117700 November = 139200-32000 = 107200 December = 126700-32000 = 94700 Total 319600 Balance of December to paid in January 36933 Total paid in October, November and December 282667

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