Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $160,000 $199,000 $206,600 Insurance expense** 1,050 1,050 1,050 Depreciation expense 2,160 2,160 2,160 Property tax expense*** 540 540 540 *Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $1,050 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are a.$189,250 b.$229,250 c.$40,000 d.$149,250
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $160,000 $199,000 $206,600 Insurance expense** 1,050 1,050 1,050 Depreciation expense 2,160 2,160 2,160 Property tax expense*** 540 540 540 *Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $1,050 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are a.$189,250 b.$229,250 c.$40,000 d.$149,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:
| April | May | June | |
| $160,000 | $199,000 | $206,600 | |
| Insurance expense** | 1,050 | 1,050 | 1,050 |
| 2,160 | 2,160 | 2,160 | |
| Property tax expense*** | 540 | 540 | 540 |
*Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.
**Insurance expense is $1,050 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
***Property tax is paid once a year in November.
The cash payments expected for Finch Company in the month of May are
a.$189,250
b.$229,250
c.$40,000
d.$149,250
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