Question

Exercise 14-11 Preparing a schedule of cash payments for selling and administrative expenses LO 14-4 The budget director for Solomon 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 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 quarter. c. 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 $ $ $ 6,800 7,800 3,020 6,800 6.900 2,830 1.100 1,700 1,800 750 21,880 6,800 7,400 2,700 1.100 1,700 1,800 1.100 1,700 1,800 750 $ 22.970 750 $ $ 22,250 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 $ 18,780 $ 18,950 $ 19,770 ReqA Req B and C > Reg A Req 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

	October	November	December
Budgeted S&A Expenses
Equipment lease expense	6800	6800	6800
Salary expense	6900	7400	7800
Cleaning supplies	2830	2700	3020
Insurance expense	1100	1100	1100
Depreciation on computer	1700	1700	1700
Rent	1800	1800	1800
Miscellaneous expenses	750	750	750
Total operating expenses	21880	22250	22970
Schedule of Cash Payments for S&A Expenses
Equipment lease expense	6800	6800	6800
Prior month’s salary expense, 100%	0	6900	7400
Cleaning supplies	2830	2700	3020
Insurance premium	6600	0	0
Depreciation on computer	0	0	0
Rent	1800	1800	1800
Miscellaneous expenses	750	750	750
Total disbursements for operating expenses	18780	18950	19770
b
Salaries payable	7800
c
Prepaid insurance	3300	=1100*3