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The budget director for Campbell Cleaning Services prepared the following list of expected selling and administrative...

The budget director for Campbell Cleaning Services prepared the following list of expected selling and administrative expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations; accordingly, there are no beginning account balances.

Required

  1. Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.

  2. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.

  3. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

October November December
Budgeted S&A Expenses
Equipment lease expense $5,700 $5,700 $5,700
Salary Expense 6,000 6,500 6,900
Cleaning Supplies 2,830 2,720 3,020
Insurance expense 1,000 1,000 1,000
Depreciation on computer 1,500 1,500 1,500
Rent 2,000 2,000 2,000
Miscellaneous expenses 650 650 650
Total operating expenses $19,680 $20,070 $20,770
Schedule of Cash Payments for S&A Expenses
Equipment lease expense
Prior month's salary expense, 100%
Cleaning Supplies
Insurance Premium
Depreciation on computer
Rent
Miscellaneous expenses
Total disbursements for operating expenses

Solutions

Expert Solution

October November December
Budgeted S&A Expenses
Equipment lease expense $5,700 $5,700 $5,700
Salary Expense $6,000 $6,500 $6,900
Cleaning Supplies $2,830 $2,720 $3,020
Insurance expense $1,000 $1,000 $1,000
Depreciation on computer $1,500 $1,500 $1,500
Rent $2,000 $2,000 $2,000
Miscellaneous expenses $650 $650 $650
Total operating expenses $19,680 $20,070 $20,770
Schedule of Cash Payments for S&A Expenses October November December
Equipment lease expense $5,700 $5,700 $5,700
Prior month's salary expense, 100% $0 $6,000 $6,500
Cleaning Supplies $2,830 $2,720 $3,020
Insurance Premium $6,000 [6 month's paid on Oct1: $1000 x 6] $0 $0
Depreciation on computer $0 [non cash expense] $0 [non cash expense] $0 [non cash expense]
Rent $2,000 $2,000 $2,000
Miscellaneous expenses $650 $650 $650
Total disbursements for operating expenses $17,180 $17,070 $17,870

ekkarill92 answered 6 months ago
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