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Tutorial 11387

Finch Company began its operations on March 31 of the current year. Finch Co. has the following projected costs: April May June Manufacturing cos...

Question:

Finch Company began its operations on March 31 of the current year.  Finch Co. has the following projected costs:                                                April              May        June Manufacturing costs (1)        $156,800    $195,200    $217,600 Insurance expense (2)        $1,000    $1,000         $1,000 Depreciation expense        $2,000    $2,000        $2,000 Property Tax expense (3)    $500    $500        $500        1     3/4 of the manufacturing costs are paid for in the month they are incurred.  1/4 is paid in the following month. 2     Insurance expense is $1,000 a month however the insurance is paid four times year in the first month of the quarter, i.e. January, April, July and October. 3     Property tax is paid once a year in November The cash payments for Finch Company in the month of April are: a)    $122,600 b)    $121,100 c)    $120,600 d)    $123,100

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