Malcolm is a retail company specializing in men’s hats. Its budget director prep

Question

Malcolm 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 $12,000 $12,000 $12,000
Sales commissions (4 percent of sales)     1,000     1,000     1,000
Supplies expense        180        195        210
Utilities        550        550        550
Depreciation on store equipment     1,500     1,500     1,500
Rent     3,300     3,300     3,300
Miscellaneous        345        345        345
Total S&A expenses before interest $18,875 $18,890 $18,905







Require

Explanation / Answer

July August September Paid in same month Salary expense          12,000           12,000          12,000 Supplies expense                180                 195                210 Rent            3,300             3,300            3,300 Miscellaneous                345                 345                345 Total S&A expenses before interest          15,825           15,840          15,855 Paid in next month Sales commissions (4 percent of sales)            1,000             1,000            1,000 Utilities                550                 550                550            1,550             1,550            1,550 Non-Cash Expense Depreciation on store equipment            1,500             1,500            1,500 Monthly cash payments Same month payment          15,825           15,840          15,855 Next month payment             1,550            1,550 Monthly cash payments          15,825           17,390          17,405

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