Answered: The cash payments expected for Finch…

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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Question

Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:

	April	May	June
Manufacturing costs*	$159,300	$195,800	$203,600
Insurance expense**	1,140	1,140	1,140
Depreciation expense	1,820	1,820	1,820
Property tax expense***	500	500	500

* 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 $1,140 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 April are

a.$122,895

b.$119,475

c.$159,300

d.$141,098

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