In: Accounting
Schedule of Cash Payments for a Service Company
SafeMark 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 | $148,200 |
April | 139,300 |
May | 126,800 |
Depreciation, insurance, and property taxes represent $32,000 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. 65% 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 indicating cash payments for selling and administrative expenses for March, April, and May.
SafeMark Financial 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 | $ | $ | $ |
SafeMark Financial 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 | ($148,200-$32,000)*65% = $75,530 | ||
Paid in April | ($148,200-$32,000)*35% = $40,670 | ||
April Expenses | |||
Paid inApril | ($139,300-$32,000)*65% = $69,745 | ||
Paid in May | ($139,300-$32,000)*35% = $37,555 | ||
May Expenses | |||
Paid May | ($126,800-$32,000)*65% = $61,620 | ||
Total cash payments | $ 75,530 | $ 110,415 | $ 99,175 |
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