Baird is a retail company specializing in men’s hats. Its budget director prepar

Question

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.

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.

July August September Salary expense $ 17,700 $ 17,700 $ 17,700 Sales commissions (4 percent of sales) 1,900 1,900 1,900 Supplies expense 360 390 420 Utilities 2,900 2,900 2,900 Depreciation on store equipment 2,600 2,600 2,600 Rent 6,500 6,500 6,500 Miscellaneous 660 660 660 Total S&A expenses before interest $ 32,620 $ 32,650 $ 32,680

Explanation / Answer

Baird, a Retail Company Schedule of Cahs Payment for Selling and Administrative Expense July August September Salary Expense $17,700 $17,700 $17,700 Sales Comission (4% of Sales) $1,900 $1,900 Supplies Expense $360 $390 $420 Utilities $0 $2,900 $2,900 Rent $6,500 $6,500 $6,500 Miscellaneous $660 $660 $660 Total Payment $25,220 $30,050 $30,080 b. The Amount of Utilities Payment as of September 30 will be $2900 b. The Amount of Sales Comission as of September 30 will be $1900

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