Answer 2 - from January(12 of $800,000 3 What amount of...

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Sample Problem Set #2 Solutions: 1. What amount of Selling Expense will be reported for the month of March ? The expense is reported as incurred without regard as to the timing of the disbursement. Selling expense for March would be $127,000 which includes the $55,000 (including depreciation expense) plus 12% of March Sales of $600,000. 2. What amount of cash will be disbursed during the month of February ? The cash disbursed would NOT include depreciation, and there is a timing issue for the disbursement vs. the expense. In February we will disburse $126,000 which is the $30,000 net of depreciation fixed S&A from January PLUS $96,000 variable S&A
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Unformatted text preview: from January (12% of $800,000) 3. What amount of Accounts Payable will be booked on February 28 for payment during March ? The Accounts Payable at the end of February would include all expenses incurred but not yet paid NET of depreciation since that amount would not be payable in cash. Therefore February 28 A/P would be $114,000 which is $30,000 in Fixed Costs from February and $84,000 in VC from February (12% of $700,000)...
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This note was uploaded on 10/20/2008 for the course ACCT 210 taught by Professor Blanchard during the Spring '08 term at Arizona.

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