1. The following details have been extracted from the budget of a merchandising company. Rent Expense $8,000 per month Depreciation Expense $ 3,500 per month Insurance Expense $1,250 per month Miscellaneous Expense 2% of sales, paid as incurred Commissions Expense 10% of sales Salaries Expense $7,000 per month Dec Jan Feb March Sales $45,000 $50,000 $65,000 $80,000 C ommission and salaries expenses are paid 50% in the month to which they relate and the balance in the next month. Rent and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at the beginning of the quarter. Calculate cash payments for the selling and administrative expenses for the first quarter of the next year. A. 70400 B 50500 C 75000 D 62750

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1. The following details have been extracted from the budget of a merchandising company.
Rent Expense $8,000 per month
Depreciation Expense $ 3,500 per month
Insurance Expense $1,250 per month
Miscellaneous Expense 2% of sales, paid as incurred
Commissions Expense 10% of sales
Salaries Expense $7,000 per month
Dec Jan Feb March Sales $45,000 $50,000 $65,000 $80,000 C
ommission and salaries expenses are paid 50% in the month to which they relate and the balance in the next month. Rent
and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at the beginning of the quarter.
Calculate cash payments for the selling and administrative expenses for the first quarter of the next year.
A. 70400
B 50500
C 75000
D 62750
Transcribed Image Text:1. The following details have been extracted from the budget of a merchandising company. Rent Expense $8,000 per month Depreciation Expense $ 3,500 per month Insurance Expense $1,250 per month Miscellaneous Expense 2% of sales, paid as incurred Commissions Expense 10% of sales Salaries Expense $7,000 per month Dec Jan Feb March Sales $45,000 $50,000 $65,000 $80,000 C ommission and salaries expenses are paid 50% in the month to which they relate and the balance in the next month. Rent and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at the beginning of the quarter. Calculate cash payments for the selling and administrative expenses for the first quarter of the next year. A. 70400 B 50500 C 75000 D 62750
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