Springfield Company\'s master budget includes estimated costs and expenses of $4

Question

Springfield Company's master budget includes estimated costs and expenses of $400,000 for its third quarter of operations. Of this amount, $377,000 is expected to be financed with current payables. Depreciation expense for the quarter is budgeted at $20,000. Springfield's prepayments balance at the end of the third quarter is expected to be twice that of its prepayments balance at the beginning of the quarter. The company estimates it will prepay expenses totaling $6,800 in the third quarter.

What is Springfield's budgeted prepayments balance at the end of the third quarter?

Explanation / Answer

Springfield's budgeted prepayments balance at the end of the third quarter is as follows Particulars Amount ($) Balance at beginning of the year 6800 Estimate Cash expenditure during the year (400,000+20,000) 420,000 Total Prepayments 426,800 Less Expiration of Prepayments (6800*2) 13600 Prepayments at the end of Quarter 413,200

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.