Schedule of cash payments for a service company Horizon Financial Inc. was organ

Question

Schedule of cash payments for a service company

Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows:

Depreciation, insurance, and property taxes represent $18,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. 74% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.

Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.

March $87,500 April 80,500 May 73,300 Excel Learning Systems Inc. Schedule of Cash Payments for Selling and Administrative Expenses For the Three Months Ending May 31 March April May March expenses: Paid in March Paid in April April expenses: Paid in April Paid in May May expenses: Paid in May Total cash payments

Explanation / Answer

Solution:

Excel learning System Inc. Schedule of cash payments for Selling and Administrative expenses For the three month ended May 31 Particulars March April May March Expenses: Paid in March $51,430.00 Paid in April $18,070.00 April Expenses: Paid in April $46,250.00 Paid in May $16,250.00 May Expenses: Paid in May $40,922.00 Total Cash Payments $51,430.00 $64,320.00 $57,172.00

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