FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Barnes Company expects to begin operating on January 1. The company's master budget contained the following operating expense budget:
January February March Salary
Expenses;
$36,000 $36,000 $36,000 Sales commissions, 5% of sales 30,000 32,000 24,000
Utilities:
2,800 2,800 2,800
Depreciation on store equipment 1,000 1,000 1,000
Rent
7,200 7,200 7,200 Miscellaneous:
1,800 1,800 1,800
Total operating expenses
$78,800 $80,800 $72,800
Sales commissions are paid in cash in the month following the month in which the expense is recognized. All other expense items requiring cash payment are paid in the month in which they are recognized. The amount of accumulated depreciation appearing on the company's March 31 pro forma balance sheet is:
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