Excel Learning Systems Inc. was organized on September 30, 2016. Projected selli

Question

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:

October $142,700
November 132,700
December 120,800

Depreciation, insurance, and property taxes represent $30,000 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 74% 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.

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 $

Paid in November
$
November expenses:


Paid in November

Paid in December

$
December expenses:


Paid in December

Total cash payments $ $ $

Explanation / Answer

Cash payment Budget is as prepared below:

Excel Learning Systems Inc. Schedule of Cash Payments for Selling and Administrative Expenses For the Three Months Ending December 31, 2016 October November December Total October Expenses: Paid in October (142,700-30,000)*.74 83,398 83,398 Paid in November (142,700-30,000)*.26 29,302 29,302 November Expenses: Paid in November (132,700-30,000)*.74 75,998 75,998 Paid in December (132,700-30,000)*.26 26,702 26,702 December Expenses: Paid in December (120,800-30,000)*.74 67,192 67,192 Total cash payments 83,398 105,300 93,894 282,592

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