Question

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	$157,300
April	144,700
May	131,700

Depreciation, insurance, and property taxes represent $33,000 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. 60% 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	$	$	$

Answer 1

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	74,580
Paid in April		49,720
April expenses:
Paid in April		67,020
Paid in May			44,680
May expenses:
Paid in May			59,220
Total cash payments	74,580	116,740	103,900
Working
	March	April	May
March expenses:
Paid in March	(157,300 - 33,000)*60%
Paid in April		(157,300 - 33,000)*40%
April expenses:
Paid in April		(144,700 - 33,000)*60%
Paid in May			(144,700 - 33,000)*40%
May expenses:
Paid in May			(131,700 - 33,000)*60%
Total cash payments	-