a. Surity Corporation pays for 55% of its direct materials purchases in the month of purchase and the remainder the following month. Last month's direct material purchases were $79,000, while the company anticipates $81,000 of direct material purchases next month. b. Direct labor for the upcoming month is budgeted to be $35,000 and will be paid at the end of the upcoming month. c. Manufacturing overhead is estimated to be 160% of direct labor cost each month and is paid in the month in which it is incurred. This monthly estimate includes $11,000 of depreciation on the plant and equipment. d. Monthly operating expenses for next month are expected to be $42,000, which includes $2,800 of depreciation on office equipment and $1,500 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred. e. Surity Corporation will be making an estimated tax payment of $7,700 next month.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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a. Surity Corporation pays for 55% of its direct materials purchases in the month of purchase and the
remainder the following month. Last month's direct material purchases were $79,000, while the company
anticipates $81,000 of direct material purchases next month.
b. Direct labor for the upcoming month is budgeted to be $35,000 and will be paid at the end of the upcoming
month.
c. Manufacturing overhead is estimated to be 160% of direct labor cost each month and is paid in the month
in which it is incurred. This monthly estimate includes $11,000 of depreciation on the plant and equipment.
d. Monthly operating expenses for next month are expected to be $42,000, which includes $2,800 of
depreciation on office equipment and $1,500 of bad debt expense. These monthly operating expenses are
paid during the month in which they are incurred.
e. Surity Corporation will be making an estimated tax payment of $7,700 next month.
Transcribed Image Text:a. Surity Corporation pays for 55% of its direct materials purchases in the month of purchase and the remainder the following month. Last month's direct material purchases were $79,000, while the company anticipates $81,000 of direct material purchases next month. b. Direct labor for the upcoming month is budgeted to be $35,000 and will be paid at the end of the upcoming month. c. Manufacturing overhead is estimated to be 160% of direct labor cost each month and is paid in the month in which it is incurred. This monthly estimate includes $11,000 of depreciation on the plant and equipment. d. Monthly operating expenses for next month are expected to be $42,000, which includes $2,800 of depreciation on office equipment and $1,500 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred. e. Surity Corporation will be making an estimated tax payment of $7,700 next month.
Surity Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments:
1 Click the icon to view the data.)
How much cash will be paid out next month?
Surity Corporation
Cash Payments Budget
Cash payments for direct materials:
45% of last month's purchases
55% of next month's purchases
Cash payments for direct labor
Cash payments for manufacturing overhead
Cash payments for operating expenses
Cash payment for taxes
Total cash payments
Transcribed Image Text:Surity Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments: 1 Click the icon to view the data.) How much cash will be paid out next month? Surity Corporation Cash Payments Budget Cash payments for direct materials: 45% of last month's purchases 55% of next month's purchases Cash payments for direct labor Cash payments for manufacturing overhead Cash payments for operating expenses Cash payment for taxes Total cash payments
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