Question

The budget director for Munoz Cleaning Services prepared the following list of expected selling and administrative expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations, accordingly, there are no beginning account balances. Required a. Complete the schedule of cash payments for S&A expenses by filling in the missing amounts. b. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter. c. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter. Complete this question by entering your answers in the tabs below. Reg A Reg B and C Complete the schedule of cash payments for S&A expenses by filling in the missing amounts. October November December Budgeted S&A Expenses Equipment lease expense Salary expense $ $ $ 5,200 6,400 5,200 6,900 5,200 7,300

Answer 1

	October	November	December
Budgeted S&A Expenses
Equipment lease expense	5200	5200	5200
Salary expense	6400	6900	7300
Cleaning supplies	2830	2730	3080
Insurance expense	1000	1000	1000
Depreciation on computer	1900	1900	1900
Rent	2100	2100	2100
Miscellaneous expenses	780	780	780
Total operating expenses	20210	20610	21360
Schedule of Cash Payments for S&A Expenses
Equipment lease expense	5200	5200	5200
Prior month’s salary expense, 100%	0	6400	6900
Cleaning supplies	2830	2730	3080
Insurance premium	6000	0	0
Depreciation on computer	0	0	0
Rent	2100	2100	2100
Miscellaneous expenses	780	780	780
Total disbursements for operating expenses	16910	17210	18060
b
Salaries payable	7300
c
Prepaid insurance	3000	=1000*3