Schedule of Cash Payments Excel Learning Systems Inc. was organized on September
ID: 2462897 • Letter: S
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 $36,000 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 64% 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.
October $166,600 November 158,300 December 144,100Explanation / 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: (166000-36000) =130000:
Paid in October (130000*64%)
$ 83,200
Paid in November (130000*36%)
$ 46,800
November expenses: (158300-36000) =122300
Paid in November (122300*64%)
$ 78,272
Paid in December (122300*36%)
$ 44,028
December expenses: (144100-36000) = 108100
Paid in December (108100*64%)
$ 69,184
Total cash payments
$ 83,200
$ 125,072
$ 113,212
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: (166000-36000) =130000:
Paid in October (130000*64%)
$ 83,200
Paid in November (130000*36%)
$ 46,800
November expenses: (158300-36000) =122300
Paid in November (122300*64%)
$ 78,272
Paid in December (122300*36%)
$ 44,028
December expenses: (144100-36000) = 108100
Paid in December (108100*64%)
$ 69,184
Total cash payments
$ 83,200
$ 125,072
$ 113,212
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