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Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:   April May June Manufacturing costs* $156,800 $195,200 $217,600 Insurance expense** 1,000 1,000 1,000 Depreciation expense 2,000 2,000 2,000 Property tax expense*** 500 500 500 *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of April are a.$120,600 b.$123,100 c.$121,100 d.$122,600

Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:   April May June Manufacturing costs* $156,800 $195,200 $217,600 Insurance expense** 1,000 1,000 1,000 Depreciation expense 2,000 2,000 2,000 Property tax expense*** 500 500 500 *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of April are a.$120,600 b.$123,100 c.$121,100 d.$122,600

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 19E: Schedule of cash payments for service company Horizon Financial Inc. was organized on February 28....
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  1. Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:

      April May June
    Manufacturing costs* $156,800 $195,200 $217,600
    Insurance expense** 1,000 1,000 1,000
    Depreciation expense 2,000 2,000 2,000
    Property tax expense*** 500 500 500

    *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month.
    **Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October).
    ***Property tax is paid once a year in November.

    The cash payments expected for Finch Company in the month of April are

    a.$120,600
    b.$123,100
    c.$121,100
    d.$122,600

 

 

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