The budget director for Vernon Cleaning Services prepared the following list of

Question

The budget director for Vernon 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 a. Complete the schedule of cash payments for S&A; expenses by filling in the missing amounts. b. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter c. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter Complete this question by entering your answers in the tabs below Req A Req B and C Complete the schedule of cash payments for S&A; expenses by filling in the missing amounts October November December Budgeted S&A; Expenses Equipment lease expense Salary expense Cleaning supplies nsurance expense Depreciation on computer Rent Miscellaneous expenses Total operating expenses Schedule of Cash Payments for S&A; Expenses Equipment lease expense Prior month's salar Cleaning supplies Insurance premium Depreciation on computer Rent $ 6,500 $ 6,500 $6,500 7,500 3,070 1,300 1,600 1,600 660 $ 21,140 $ 21,510 $ 22,230 6,600 2,880 1,300 1,600 1,600 660 7,100 2,750 1,300 1,600 1,600 660 y expense, 100%

Explanation / Answer

Schedule of Cash Payments for S&A Expenses : October November December Equipment Lease Expenses 6500 6500 6500 Prior month's salary expense -100% 0 6600 7100 Cleaning Supplies 2880 2750 3070 Insurance Premium 7800 0 0 Depreciation on Computer 0 0 0 Rent 1600 1600 1600 Miscellaneous expenses 660 660 660 Total Disbursement for operating expenses 19440 18110 18930 b Salaries payable = $7500 c Prepaid insurance=7800-(1300*3) = $3900

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