Schedule of Cash Payments Excel Learning Systems Inc. was organized on September

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: October November December Depreciation, insurance, and property taxes represent $37,000 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 62% 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 mont Prepare a schedule indicating cash payments for selling and administrative expenses for October, November, and December $172,200 163,600 148,900 Excel Learning Systems Inc. Schedule of Cash Payments for Selling and Administrative Expenses For the Three Months Ending December 31, 2016 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

October :

Selling and adminstrative expenses : $1,72,200

(-) Dep, Insurance, Property tax      : $   37,000

So, Net selling and administrative expenses : $ 1,35,200

62 % of 1,35,200 = 1,35,200 X 62/100    = $83,824   :

Balance expenses which will be carried forward to the next month (Nov) = $1,35,200 - $ 83,824 = $ 51,376

NOVEMBER :

Selling and adminstrative expenses : $1,63,600

(-) Dep, Insurance, Property tax      : $   37,000

So, Net selling and administrative expenses : $ 1,26,600

62 % of 1,26,600 = 1,26,600 X 62/100    = $ 78,492 :

Balance expenses which will be carried forward to the next month (Dec) = $ 1,26,600 - $ 78,492 = $ 48,108

DECEMBER:

Selling and adminstrative expenses : $ 1,48,900

(-) Dep, Insurance, Property tax      : $   37,000

So, Net selling and administrative expenses : $ 1,11,900

62 % of 1,11,900 = 1,11,900 X 62/100    = $ 69,378 :

Balance expenses which will be carried forward to the next month (Jan) = $ 1,11,900 - $ 69,378 = $ 42,522

ANSWER:

                                            OCTOBER                     NOVEMBER                        DECEMBER

October Expenses

Paid in October                       $83,824

Paid in November                                                       $ 51,376

November Expenses

Paid in November                                                       $ 78,492                               

Paid in December                                                                                                   $ 48,108

December Expenses                                                                                                     

Paid in December                                                                                                   $ 69,378

TOTAL CASH PAYMENTS         $ 83,824                   $1,29,868                            $1,17,486

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