Question

The following details have been extracted from ten budget of a merchandising company. Rent expense :...

The following details have been extracted from ten budget of a merchandising company.

Rent expense : $8,700 per month
Depreciation expense: $ 4,000 per month
Insurance expense: $1,250 per month
Miscellaneous expense: 4% of sales, paid as incurred
Commission expense: 10% of sales
Salaries expense: $6000 per month

Sales: dec $70,000 Jan $75,000 feb $90,000 mar $105000


Commissions and salaries expenses are paid 50% in month to which they are incurred and the balance next month. Rent and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at the beginning of yen quarter. Calculate cash payments for the selling and administrative expenses for the first quarter of the next year.

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