January budgeted selling and administrative expenses for the retail shoe store that Craig Shea plans to open on January 1, year 1, are as follows: sales commissions, $27,500; rent, $12,500; utilities, $5,600; depreciation, $3,800; and miscellaneous, $1,500. Utilities are paid in the month after they are incurred. Other expenses are expected to be paid in cash in the month in which they are incurred. Required a. Determine the amount of budgeted cash payments for January selling and administrative expenses. b. Determine the amount of utilities payable the store will report on the January 31 pro forma balance sheet. c. Determine the amount of depreciation expense the store will report on the income statement for year 1, assuming that monthly depreciation remains the same for the entire year. a. Budgeted cash payments b. Utilities payable c. Depreciation expense A

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It…

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future…