Cash payments for direct materials: 45% of current month purchases 55% of last month's purchases Cash payments for direct labor Cash payments for manufacturing overhead Cash payments for operating expenses Cash payments for new server Cash payment for taxes Total cash payments a. The company pays for 45% of its direct materials purchases in the month of purchase and the remainder the following month. The company's direct material purchases for March through June are anticipated to be as follows: March April May June $ 117,000 $ 139,000 $ 122,000 $ 146,000 b. Direct labor is paid in the month in which it is incurred. Direct labor for each month of the second quarter is budgeted as follows: April May June 52,000 $ 62,000 $ 77,000 c. Manufacturing overhead is estimated to be 160% of direct labor cost each month. This monthly estimate includes $32,000 of depreciation on the plant and equipment. All manufacturing overhead (excluding depreciation) is paid in the month in which it is incurred. d. Monthly operating expenses for March through June are projected to be as follows: March April May June 77,000 $ 89,000 $ 84,000 $ $ $ 91,000 Monthly operating expenses are paid in the month after they are incurred. Monthly operating expenses include $12,000 for monthly depreciation on administrative offices and equipment, and $2,700 for bad debt expense. e. The company plans to pay $6,000 (cash) for a new server in May. f. The company must make an estimated tax payment of $13,000 on June 15. The LaChut Company is preparing its cash payments budget. The following items relate to cash payments the company anticipates making during the second quarter of the upcoming year. Click the icon to view the cash payment information.) Requirement Prepare a cash payments budget for April, May, and June and for the quarter. (If a box is not used in the table leave the box empty; do not enter a zero.) The LaChut Company Cash Payments Budget For the Months of April through June April May Cash payments for direct materials: 45% of current month purchases 55% of last month's purchases June Quarter
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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