Preparing a schedule of cash payments for selling and administrative
expenses
Prestia 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 the expenses are incurred except sales commissions and utilities, which are paid in the month after they are incurred. July is the first month of operations, so there are no beginning account balances.
| July | August | September |
Salary expense | $18,000 | $18,000 | $18,000 |
Sales commissions (4 percent of sales) | 1,700 | 1,700 | 1,700 |
Supplies expense | 360 | 390 | 420 |
Utilities | 1,100 | 1,100 | 1,100 |
Depreciation on store equipment | 3,000 | 3,000 | 3,000 |
Rent | 6,600 | 6,600 | 6,600 |
Miscellaneous | 690 | 690 | 690 |
Total S&A expenses before interest | $31,450 | $31,480 | $31,510 |
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.
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