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#6 Schedule of cash payments for a service company Horizon Financial Inc. was organized on February...

#6

Schedule of cash payments for a service company

Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows:

March $172,900
April 164,300
May 149,500

Depreciation, insurance, and property taxes represent $37,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. 66% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.

Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.

Excel Learning Systems Inc.
Schedule of Cash Payments for Selling and Administrative Expenses
For the Three Months Ending May 31
March April May
March expenses:
Paid in March $
Paid in April $
April expenses:
Paid in April
Paid in May $
May expenses:
Paid in May
Total cash payments $ $ $

Solutions

Expert Solution

Excel Learning Systems Inc.

Schedule of Cash Payments for Selling and Administrative Expenses

For the Three Months Ending May 31

March

April

May

March expenses:

Paid in March

$ 89,694.00

Paid in April

$ 46,206.00

April expenses:

Paid in April

$ 84,018.00

Paid in May

$ 43,282.00

May expenses:

Paid in May

$ 74,250.00

Total cash payments

$ 89,694.00

$ 130,224.00

$ 117,532.00

March

April

May

Total Selling and Administrative expenses

$ 172,900.00

$ 164,300.00

$ 149,500.00

Less: Non cash expense

$    37,000.00

$    37,000.00

$    37,000.00

Cash expenses

$ 135,900.00

$ 127,300.00

$ 112,500.00

Paid in current month

$    89,694.00

$    84,018.00

$    74,250.00

Paid in next month

$    46,206.00

$    43,282.00

$    38,250.00


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