Question

Given the following information for Nester Company, answer the questions shown below:

		December	January	February	March
Sales		$500,000	$550,000	$450,000	$600,000
Purchases		$120,000	$140,000	$115,000	$150,000

Twenty percent of purchases are paid in cash at the time of purchase. The remaining balance is paid in the month following the purchase.

Monthly operating expenses are as follows:

Sales salaries	$10,000
Depreciation expense	$2,500
Property taxes	$2,000	paid at the end of each calendar quarter
Sales commissions	1.5%	paid in the month following the sale

Each question should have one amount in the answer field.

You must enter your answer in the following format: $x,xxx

Total cash payments for inventory purchases for the quarter ending March 31, 2018

Total cash payments for sales salaries for the quarter ending March 31, 2018

Total cash payments for property tax for the quarter ending March 31, 2018

Total cash cash payments for sales commissions for the quarter ending March 31, 2018

Total cash payments for depreciation for the quarter ending March 31, 2018

Answer 1

Part A

Total cash payments for inventory purchases for the quarter ending March 31, 2018

January = 140000*20% =28000

February = (115000*20%) +(120000*80%)= 119000

March = (150000*20%)+(140000*80%) =142000

Total cash payments for inventory purchases for the quarter ending March 31, 2018 = $289,000

Part B

Total cash payments for sales salaries for the quarter ending March 31, 2018

January = 10000

February = 10000

March = 10000

Total cash payments for sales salaries for the quarter ending March 31, 2018 = $30,000

Part C

Total cash payments for property tax for the quarter ending March 31, 2018 = $2,000

Part D

Total cash cash payments for sales commissions for the quarter ending March 31, 2018

January =500000*1.5% = 7500

February = 550000*1.5% =8250

March = 450000*1.5% = 6750

Total cash cash payments for sales commissions for the quarter ending March 31, 2018 = $22,500

Part E

Total cash payments for depreciation for the quarter ending March 31, 2018

January = 2,500

February = 2,500

March = 2,500

Total cash payments for depreciation for the quarter ending March 31, 2018 = $7,500