Question

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

	April	May	June
Manufacturing costs*	$159,000	$197,000	$200,000
Insurance expense**	1,100	1,100	1,100
Depreciation expense	2,020	2,020	2,020
Property tax expense***	440	440	440

*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 $1,100 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 for Finch Company expected in the month of June are

a.$49,250

b.$199,250

c.$150,000

d.$248,500

Answer 1

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