Question

In: Accounting

January budgeted selling and administrative expenses for the retail shoe store that Nadege Weib plans to...

January budgeted selling and administrative expenses for the retail shoe store that Nadege Weib plans to open on January 1, 2014, are as follows: sales commissions, $28,000; rent, $14,500; utilities, $6,000; depreciation, $4,600; and miscellaneous, $1,800. Utilities are paid in the month after incurrence. Other expenses are expected to be paid in cash in the month in which they are incurred.
Required
a.

Determine the amount of budgeted cash payments for January selling and administrative expenses.

     

b.

Determine the amount of utilities payable the store will report on the January 31st pro forma balance sheet.

     

c.

Determine the amount of depreciation expense the store will report on the income statement for the year 2014, assuming that monthly depreciation remains the same for the entire year.

     

Solutions

Expert Solution

Requirement a

Answer------$44,300.

.

Requirement b

Answer---------$6,000

.

Requirement c

Answer--------$55,200

.

Working

January
Sales commission $       28,000.00
Rent $       14,500.00
Utilities $          6,000.00
Miscelanious $          1,800.00
Depreciation $          4,600.00
Total selling and administrative expenses $       54,900.00
Less: Non cash expense (depreciation) $          4,600.00
Total cash expense $       50,300.00
Less: Expense paid in next month (Utilities) $          6,000.00
Budgeted cash paid in January $       44,300.00

Depreciation for the year = 4600 x 12= $55,200

ekkarill92 answered 2 years ago
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