Company has the following projected costs for manufacturing and selling and admi
ID: 2567485 • Letter: C
Question
Company has the following projected costs for manufacturing and selling and administrative expenses:
Direct materials purchases
$3,700
$3,500
$4,400
Direct labor costs
3,000
3,400
3,800
Depreciation on plant
700
700
700
Utilities for plant
550
550
550
Property taxes on plant
310
310
310
Depreciation on office
500
500
500
Utilities for office
350
350
350
Property taxes on office
180
180
180
Office salaries
2,500
2,500
2,500
(Click the icon to view the projected costs.) All costs are paid in month incurred except: direct materials, which are paid in the month following the purchase; utilities, which are paid in the month after incurred; and property taxes, which are prepaid for the year on
January
2. The Accounts Payable and Utilities Payable accounts have a zero balance on January
1. Prepare a schedule of cash payments forMaynardforJanuary,February,and March.Determine the balances in Prepaid Property Taxes, Accounts Payable, and Utilities Payable as ofMarch31
(If a box is not used in the table leave the box empty; do not enter a zero.)
January
February
March
Total
Cash Payments
Direct Materials:
Accounts Payable balance, January 1
January—Direct material purchases paid in February
February—Direct material purchases paid in March
Total payments for direct materials
Direct Labor:
Total payments for direct labor
Direct Labor:
Total payments for direct labor
Manufacturing Overhead:
Utilities for plant
Property taxes on plant
Total payments for manufacturing overhead
Selling and Administrative Expenses:
Utilities for office
Property taxes on office
Office salaries
Total payments for Selling and Admin. expenses
Total cash payments
Acccount balances, March 31:
Prepaid Property Taxes
Accounts Payable
Utilities Payable
January
February
March
Total
Cash Payments
Direct Materials:
Accounts Payable balance, January 1
January—Direct material purchases paid in February
February—Direct material purchases paid in March
Total payments for direct materials
Direct Labor:
Total payments for direct labor
Direct Labor:
Total payments for direct labor
Manufacturing Overhead:
Utilities for plant
Property taxes on plant
Total payments for manufacturing overhead
Selling and Administrative Expenses:
Utilities for office
Property taxes on office
Office salaries
Total payments for Selling and Admin. expenses
Total cash payments
Acccount balances, March 31:
Prepaid Property Taxes
Accounts Payable
Utilities Payable
Explanation / Answer
January February March Direct Material Purchase 3,700 3,500 4,400 Cash Payment A 3,700 3,500 Paid in next month Direct Labor B 3,000 3,400 3,800 Paid in Same month Manufacuturing overhead Utilities 550 550 Paid in next month Property tax 3,720 Paid in advance for 12 month (310*12) Total C 3,720 550 550 Sellling and administrative overhead Utilities for office 350 350 Paid in next month Office salary 2,500 2,500 2,500 Paid in Same month Property tax 2,160 Paid in advance for 12 month (180*12) Total D 4,660 2,850 2,850 Total Cash Payment (A+B+C+D) 11,380 10,500 10,700 Account balances Factory Office Property tax 3,720 2,160 Less amortizatoin factory (930) Less amortizatoin office (540) Outstanding balance 2,790 1,620 Total 4,410 Accounts Payable Payable for march material 4,400 Utilities Payable for march Utility-Factory 550 Payable for march Utility-Office 350 Total 900
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