The following details have been extracted from the budget of a merchandising $8,500 per month $4,000 per month $1,250 per month Rent Expense Depreciation Expense Insurance Expense Miscellaneous Expense Commissions Expense Salaries Expense Sales Dec $65,000 4% of sales, paid as incurred 10% of sales $6,000 per month OA. $33,950 OB. $47,250 OC. $81,200 OD. $27,800 Jan Feb $70,000 $85,000 March $100,000 Commissions and salaries expenses are paid 50% in the month to which they are incurred and the balance in the next month. Rent and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at the beginning of the quarter. Calculate cash payments for the selling and administrative expenses for the first quarter of the next year.
The following details have been extracted from the budget of a merchandising $8,500 per month $4,000 per month $1,250 per month Rent Expense Depreciation Expense Insurance Expense Miscellaneous Expense Commissions Expense Salaries Expense Sales Dec $65,000 4% of sales, paid as incurred 10% of sales $6,000 per month OA. $33,950 OB. $47,250 OC. $81,200 OD. $27,800 Jan Feb $70,000 $85,000 March $100,000 Commissions and salaries expenses are paid 50% in the month to which they are incurred and the balance in the next month. Rent and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at the beginning of the quarter. Calculate cash payments for the selling and administrative expenses for the first quarter of the next year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:The following details have been extracted from the budget of a merchandising company.
$8,500 per month
$4,000 per month
Rent Expense
Depreciation Expense
Insurance Expense
Miscellaneous Expense
$1,250 per month
4% of sales, paid as incurred
Commissions Expense
Salaries Expense
Sales
Dec
$65,000
10% of sales
$6,000 per month
OA. $33,950
B. $47,250
OC. $81,200
O D. $27,800
Jan
Feb
$70,000 $85,000
March
$100,000
Commissions and salaries expenses are paid 50% in the month to which they are incurred and the
balance in the next month. Rent and miscellaneous expenses are paid as and when they occur.
Insurance is prepaid at the beginning of the quarter. Calculate cash payments for the selling and
administrative expenses for the first quarter of the next year.
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