Franklin is a retail company specializing in men\'s hats. Its budget director pr

Question

Franklin 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 Sales commissions (4 percent of sales) Supplies expense Utilities Depreciation on store equipment Rent Miscellaneous Total S&A; expenses before interest $18,800 $18,800 $18,800 2,000 340 1,900 2,900 6,000 680 $32,560 $32,590 $32,620 2,000 280 1,900 2,900 6,000 680 2,000 310 1,900 2,900 6, 000 680 Requirec 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

Explanation / Answer

Schedule of Cash payments for S & A expenses July August September Salary expense 18,800 18,800 18,800 Sales commission 0 2,000 2,000 Supplies expense 280 310 340 Utilities 0 1,900 1,900 Depreciation on store equipment 0 0 0 Rent 6,000 6,000 6,000 miscellaneous 680 680 680 total S&A expenses before interest 25,760 29,690 29,720 (note:depreciation is a non cash expense) b) utilities payable 1,900 c) Sales commission payable 2,000

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