Question

Exercise 14-11 Preparing a schedule of cash payments for selling and administrative expenses LO 14 The budget director for Baird Cleaning Services prepared the following list of expected selling and administrative expenses. All tre paid for in the month incurred except salary expense and insurance. Salary is paid in the m 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 quarte c. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quar Complete this question by entering your answers in the tabs below. Req A Req 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 $ 5,600 $ 5,600 S Salary expense 3336,100 6,600 Cleaning supplies 2,860 2,740 Insurance expense 1,900 1,900 Depreciation on computer 1,800 1,800 1,800 Rent REALITATE1,900 31.900 1.900 Miscelaneous expenses 700 700 700 Total operating expenses R $ 20,860 $ 21,240 $ 21910

Answer 1

Cash Budget October Month November December 5,600 5,600 6,100 2,740 5,600 6,600 3,010 Bedgeted S&A Expenses Equipment lease expense Prior month's salary expense, 100% Cleaning expense Insurance premium (1900*6) Rent Miscellaneous expenses Total disbursement for operating expenses 2,860 11,400 1,900 700 22,460 1,900 700 17,040 1,900 700 17,810 $ $ Explanation: Salary is paid in the next month and octoner id the first month of operation so there is no prior salary expense to be paid in october. Depreciation is a non cash expense and thus not included. Salaries payable Prepaid insurance (1900*3) 7,000 5,700 Explanation: Salary expense incurred in December for $7,000 is payable in January. Insurance is paid for six months on 1 october but fourth quarter ends on december. It is still advance for 3 months from January to March. Please give likes for the hard work.