Question

Answer completely and correctly please.

1. Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows:

2. March	$93,000
   April	86,500
   May	78,700

   Depreciation, insurance, and property taxes represent $20,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. 69% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.

   Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.

   Horizon Financial Inc.
   Schedule of Cash Payments for Selling and Administrative Expenses
   For the Three Months Ending May 31
   	March	April	May
   March expenses:
   Paid in March	$
   Paid in April		$
   April expenses:
   Paid in April
   Paid in May			$
   May expenses:
   Paid in May
   Total cash payments	$	$	$

Answer 1

Horizon Financial Inc. Schedule of Cash Payments for Selling and Administrative Expenses For the Three Months Ending May 31 March April May March expenses: Paid in March $ 50,370 Paid in April $22.630 April expenses: Paid in April $45,885 Paid in May $ 20,615 May expenses: Paid in May $ 40.503 Total cash payments $50,370 $68,515 $61,118 Working Notes: March Expenses: Paid in March = ($93,000-$20,000)*69%= $50.370 Paid in April = ($93,000-$20,000)*(100%-69%) = $22.630 April Expenses: Paid in April = ($86,500-$20,000)*69% = $45,885 Paid in May = ($86,500-$20,000)*(100%-69%)=520,615 May Expenses: Paid in May = ($78,700-$20,000)*69% = 540,503