Solved: Springfieid.. Solved: Springfield.. IPPTChap0023 willi.. Saved Id Compan

Question

Solved: Springfieid.. Solved: Springfield.. IPPTChap0023 willi.. Saved Id Company's master budget includes estimated costs and expenses of $325,000 for its third quarter of operations. Of this amount, $282,000 is expected to be financed with current payables. D 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 $7100 in the third quarter What is Springfield's budgeted prepayments balance at the end of the third quarter? prepayments $ 12,900

Explanation / Answer

Prepaid expense expired during the period :325000 - 40000depreciation- 282000 = 3000

Let the beginning prepayment be x ,ending prepayment = 2x

Ending prepayment = beginning prepayment +paid during the period - expense accrued during the period

2x = x + 7100 -3000

2x- x = 4100

   x = 4100

Ending prepayment balance = 4100 *2 = 8200

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