Question

Zachary is a retail company specializing in men's hats. Its budget director prepared the list of expected operating expenses that follows. All items are paid when incurred except sales commissions and utilities, which are paid in the month following their incurrence. July is the first month of operations, so there are no beginning account balances. Salary expense Sales commissions (4 percent of sales) Supplies expense Utilities Depreciation on store equipment Rent Miscellaneous Total S&A expenses before interest July $18, 200 2,900 350 3,000 3,300 7,500 780 $36,030 August $18, 200 2,900 380 3,000 3,300 7,500 780 $36,060 September $18, 200 2,900 410 3,000 3,300 7,500 780 $36,090 Required a. Prepare a schedule of cash payments for selling and administrative expenses. b. Determine the amount of utilities payable as of September 30. c. Determine the amount of sales commissions payable as of September 30.

Answer 1

) Schedule of Cash payment for selling and administrative expense

	July	August	September
Salary expense	18200	18200	18200
Sales commission	0	2900	2900
Supplies expense	350	380	410
Utilities	0	3000	3000
Rent	7500	7500	7500
Miscellaneous expense	780	780	780
Depreciation on store equipment	0	0	0
Cash payment for selling and administrative expense	26830	32760	32790

b) Utilities payable = $3000

c) Sales commission payable = $2900