The budget director for Baird Cleaning Services prepared the following list of e
ID: 2531491 • Letter: T
Question
The budget director for Baird 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
Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.
Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.
Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.
Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.
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.
Explanation / Answer
salary payable to be reported in balance sheet at end of quarter 4 : 7800 (december month salary to be paid next month ]
c)Prepaid insurance: Insurance is expired for 3 months (1 oct -31 dec )so out of 6 month ,only 3 month insurance is prepaid . (1400*3 )= 4200 to be reported in balance sheet.
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