Baird 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.
July | August | September | |||||||
Salary expense | $ | 17,900 | $ | 17,900 | $ | 17,900 | |||
Sales commissions (4 percent of sales) | 3,500 | 3,500 | 3,500 | ||||||
Supplies expense | 340 | 370 | 400 | ||||||
Utilities | 2,400 | 2,400 | 2,400 | ||||||
Depreciation on store equipment | 2,600 | 2,600 | 2,600 | ||||||
Rent | 5,600 | 5,600 | 5,600 | ||||||
Miscellaneous | 720 | 720 | 720 | ||||||
Total S&A expenses before interest | $ | 33,060 | $ | 33,090 | $ | 33,120 | |||
Required
Prepare a schedule of cash payments for selling and administrative expenses.
Determine the amount of utilities payable as of September 30.
Determine the amount of sales commissions payable as of September 30.
--Requirement 'a'
July | August | September | Total | |
Cash Paid for: | ||||
Salary expense | $17,900 | $17,900 | $17,900 | $53,700 |
Sales commissions (4 percent of sales) | $3,500 | $3,500 | $7,000 | |
Supplies expense | $340 | $370 | $400 | $1,110 |
Utilities | $2,400 | $2,400 | $4,800 | |
Depreciation on store equipment [non cash expense] | $0 | |||
Rent | $5,600 | $5,600 | $5,600 | $16,800 |
Miscellaneous | $720 | $720 | $720 | $2,160 |
Total Cash paid for Selling & Administrative expenses | $24,560 | $30,490 | $30,520 | $85,570 |
--Requirement 'b'
Utilities Payable at Sept 30 = $ 2,400 [for September]
--Requirement 'c'
Sales Commission payable at Sept 30 = $ 3,500
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retail shoe store that Craig Shea plans to open on January 1, 2018,
are as follows: sales commissions, $24,000; rent, $17,500;
utilities, $4,100; depreciation, $3,900; and miscellaneous, $1,500.
Utilities are paid in the month after incurrence. Other expenses
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