Question

Use the information below for Finch Company to answer the question that follow.

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

	April	May	June
Manufacturing costs (1)	$160,000	$199,400	$205,700
Insurance expense (2)	810	810	810
Depreciation expense	1,810	1,810	1,810
Property tax expense (3)	520	520	520

(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred and one-fourth is paid for in the following month.
(2) Insurance expense is $810 a month; however, the insurance is paid four times yearly, in the first month of the quarter (i.e., January, April, July, and October).
(3) Property tax is paid once a year in November.

The cash payments expected for Finch Company in the month of April are

a.$122,430

b.$160,000

c.$120,000

d.$141,215

For February, sales revenue is $588,000, sales commissions are 6% of sales, the sales manager's salary is $87,800, advertising expenses are $94,700, shipping expenses total 4% of sales, and miscellaneous selling expenses are $2,600 plus ½ of 1% of sales. Total selling expenses for the month of February are

a.$246,840

b.$220,380

c.$185,100

d.$243,900

2. Woodpecker Co. has $293,000 in accounts receivable on January 1. Budgeted sales for January are $854,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are

a.$976,200

b.$780,960

c.$585,720

d.$1,269,200

Answer 1

The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet.