Question

Exercise 14-11 Preparing a schedule of cash payments for selling and administrative expenses LO 14-4

The budget director for Benson 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

1. Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.
2. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.
3. 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 Req B and C Complete the schedule of cash payments for S&A expenses by filling in the missing amounts. October November December $ $ 5,500 5,400 2,860 1,500 2,100 1,700 660 19,720 5,500 $ 5,500 5,900 6,300 2,780 3,030 1,500 1,500 2,100 2,100 1,700 1,700 660660 20,140 $ 20,790 $ $ Budgeted S&A Expenses Equipment lease expense Salary expense Cleaning supplies Insurance expense Depreciation on computer Rent Miscellaneous expenses Total operating expenses Schedule of Cash Payments for S&A Expenses Equipment lease expense Prior month's salary expense, 100% Cleaning supplies Insurance premium Depreciation on computer Rent Miscellaneous expenses Total disbursements for operating expenses $ 19,720 $ 16,040 $ 16,790 Reg A Req B and C > Req A Reg B and C Determine the amount of salaries payable and prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter. b. Salaries payable C. Prepaid insurance < Req A Req B and c )

Answer 1

a
	October	November	December
Budgeted S&A Expenses
Equipment lease expense	5500	5500	5500
Salary expense	5400	5900	6300
Cleaning supplies	2860	2780	3030
Insurance expense	1500	1500	1500
Depreciation on computer	2100	2100	2100
Rent	1700	1700	1700
Miscellaneous expenses	660	660	660
Total operating expenses	19720	20140	20790
Schedule of Cash Payments for S&A Expenses
Equipment lease expense	5500	5500	5500
Prior month’s salary expense, 100%	0	5400	5900
Cleaning supplies	2860	2780	3030
Insurance premium	9000	0	0
Depreciation on computer	0	0	0
Rent	1700	1700	1700
Miscellaneous expenses	660	660	660
Total disbursements for operating expenses	19720	16040	16790
b
Salaries payable	6300
c
Prepaid Insurance	4500	=1500*3