Question

Tadpole Learning Systems Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows: March $165,800 April 152,500 May 138,800 Depreciation, insurance, and property taxes represent $35,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in November. 59% 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.Required:Prepare a schedule indicating cash payments for selling and administrative expenses for March, April, and May.

Answer 1

Tadpole Learning Systems Inc.

Schedule of Cash Payments for Selling and Administrative Expenses:

March April May

59% paid in the month $77,172 $69,325 $61,242

Balance in the following month $53,628 $48,175

Total $77,172 $122,953 $109,417

Step-by-step explanation:

a) Data and Calculations:

March April May

Selling and admin. expenses $165,800 $152,500 $138,800

Depreciation, insurance, and

property taxes 35,000 35,000 35,000

Remainder $130,800 $117,500 $103,800

59% paid in the month $77,172 $69,325 $61,242

Balance in the following month $53,628 $48,175

Total $77,172 $122,953 $109,417