Question

Tyler Sheen is the owner of MTE Incorporated. He provided the selected opening balances as at June 1,

2019 and the budgeted information for June and July 2019.

Selected Opening Balances as of June 1, 2019
Cash                                                               Accounts Receivable Inventory Noncurrent Assets Accounts Payable Stockholder’s Equity	$75,000 130,000 240,000 100,000 50,000 640,000
Budgeted Amounts
For the month of June: Total Revenue Total General and Administration Costs Total Capital Expenditures For the month of July: Total Revenue Total General and Administration Costs Total Capital Expenditures	$310,000 195,000 150,000 410,000 200,000 250,000

The company’s monthly depreciation represents 20% of general and administration costs. Sixty percent
of the general and administration costs (excluding depreciation) are paid in the month in which they are incurred, and the rest is recorded in accounts payable to be paid in the next month. Of the $150,000 capital expenditures for June, $125,000 will be paid in July. The remaining amount will be paid in the month in which they are incurred.

a) Calculate the total cash disbursement for the month of June.

b) Calculate the total cash disbursement for the month of July.

Answer 1

PAGE No 10gooo bol. Cost boud in June (hin which incurred 3600 Solution Calculation of total cash disbursement for the month of Juul & Total General & Admin Costs les Deposciation (20%) (non cash Eup) 39000 (1000 x 20%.) has Paid in June anal 156ooo Ceip Enp Gol. Cost poud in June (in the same month (156, uvre X 60%-) but Add Eupeuses (zewrded in maynpaid) in June I Accounts payable ! 50,00 1 of may paid in pune To Gen. & Adm. Expensed paid in Cash (A) (43600. Capital Eupenditon (toseed is 190000 lena Paid in haly month en 125000 Capital Enp paid in Cash infine (3) 21000 Cash disbursements for the (A+B) 168600/

for b) Petal Cash Disbursement for the month same month Genesalaud Seleninstration costs; (A) Tofael Ereneral de Aelmn. in July 400000 her dref 204.08 Jebcos) (non-coste Émp) _40,000 760,000 Cash paid : 60% f169000 (faid in a 96,000 Add Gen & Adm. Enp of Joine paid in only 62,400 404. 166ooo terectudiopolep). n. T (A) T58400 Capital Enpenelitue? pente Capital Empeudihue L2 July) Proooo - (Assumed paid in scrue month) in which they incurred Add Capital Enp of hue paid enn July 12500 Couphal Empeudetue pued in Cash (B) 375000 Notal cash disbursements for the July month (A+B) 533,400/-