1.
Payments for purchases are made in the month after purchase. Selling expenses are 17% of sales,
administrative expenses are 10% of sales, and both are paid in the month of sale. Rent expense of
$1,600 is paid monthly. Depreciation expense is $1,300 per month.
Prepare a schedule of budgeted cash disbursements for August and September
Hector Company reports the following:
Solution
Note : Depreciation is not cash expense. Purchase is paid next month hence payment for july
purchase will be made in Aug and same for Sept
Schedule of budgeted cash disbursements Augest September
Particulars
Purchases @ past month purchases 17,400 22,200
Selling expenses @17% of current sales 6,290 6,970
Admin exp @ 10% of current sales 3,700 4,100
Rent 1,600 1,600
Total Disbursement 28,990 34,870