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Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases on June 30, which will be paid during July, total $139,398. Salaries, Advertising and Rent Payment expenses are all paid in cash in the month incurred. Depreciation expense is shown on the income statement each month. Equipment costing $10,498 will be purchased for cash during August. Calculate total cash payments budgeted for August.

Respuesta :

jepessoa

Answer:

A lot of information is missing, so I looked for a similar example. If the numbers are not exactly the same, just adjust the differences.

Direct materials purchases:

  • July $152,000
  • August $164,000
  • 20% of accounts payable paid during the month, 80% paid next month.

Salaries, Advertising and Rent (paid during the month):

  • salaries $35,090
  • advertising $12,000
  • rent $8,000
  • debt payments $1,550 (interests)

Depreciation expense is not included because it is not a cash outflow.

Other purchases:

  • Equipment for $10,498

Fein Company

Schedule of Cash Payments

For the Month of August 202x

Direct materials:

From July purchases             $121,600

From August purchases         $32,800

Total direct materials            $154,400

Other purchases:

Equipment for                         $10,498

Total other purchases            $10,498

Fixed expenses:

Salaries                                   $35,090

Advertising                              $12,000

Rent                                          $8,000

Interests on debt                      $1,550

Total fixed expenses             $56,640

Total cash payments            $221,538

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