Schedule of cash payments for a service companyHorizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are asfollows:March$152,100April139,900May127,300Depreciation, insurance, and property taxes represent $32,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, andproperty taxes for the year will be paid in June. 62% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with thebalance to be paid in the following month. Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.Horizon Financial Inc.Schedule of Cash Payments for Selling and Administrative ExpensesFor the Three Months Ending May 31MarchAprilMayMarch expenses:Paid in MarchPaid in AprilApril expenses:Paid in AprilPaid in MayMay expenses:Paid in MayTotal cash payments

Cash basis of accounting is based on actual inflow and outflow of cash and has no relation to whether revenue or expenses has become due or not Accrual basis on the other hand, is based on "due" concept whereby revenues and expenses are recognized as and when useParticulars March April May March Expenses :- Paid in March (($152,100-$32,000)*62%) $74,462 Paid in April (($152,100-$32,000)*38%) $45,638 April Expenses :- Paid in April (($139,900-$32,000)*62%) $66,898 Paid in May (($139,900-$32,000)*38%) $41,002 May Expenses :- Paid in May (($127,300-$32,000)*62%) $59,086 Total Cash Payments $74,462 $112,536 $100,088

Business

Accounting

Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May. Horizon Financial Inc. Schedule of Cash Payments for Selling and Administrative Expenses For the Three Months Ending May 31 March April May March expenses: Paid in March Paid in April April expenses: Paid in April Paid in May May expenses: Paid in May Total cash payments

Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May. Horizon Financial Inc. Schedule of Cash Payments for Selling and Administrative Expenses For the Three Months Ending May 31 March April May March expenses: Paid in March Paid in April April expenses: Paid in April Paid in May May expenses: Paid in May Total cash payments

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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