Striker Corporation is preparing its cash payments budget for next month. The following information pertains to the cash​ payments: How much cash will be paid out next month?   a. Striker Corporation pays for 55% of its direct materials purchases in the month of purchase and the remainder the following month. Last​ month's direct material purchases were $73,000​, while the company anticipates $85,000 of direct material purchases next month. b. Direct labor for the upcoming month is budgeted to be $37,000 and will be paid at the end of the upcoming month. c. Manufacturing overhead is estimated to be 150% of direct labor cost each month and is paid in the month in which it is incurred. This monthly estimate includes $18,000 of depreciation on the plant and equipment. d. Monthly operating expenses for next month are expected to be $45,000​, which includes $2,800 of depreciation on office equipment and $1,200 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred. e. Striker Corporation will be making an estimated tax payment of $7,100 next month.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Striker Corporation is preparing its cash payments budget for next month. The following information pertains to the cash​ payments: How much cash will be paid out next month?
 
a.
Striker
Corporation pays for
55%
of its direct materials purchases in the month of purchase and the remainder the following month. Last​ month's direct material purchases were
$73,000​,
while the company anticipates
$85,000
of direct material purchases next month.
b.
Direct labor for the upcoming month is budgeted to be
$37,000
and will be paid at the end of the upcoming month.
c.
Manufacturing overhead is estimated to be
150%
of direct labor cost each month and is paid in the month in which it is incurred. This monthly estimate includes
$18,000
of depreciation on the plant and equipment.
d.
Monthly operating expenses for next month are expected to be
$45,000​,
which includes
$2,800
of depreciation on office equipment and
$1,200
of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred.
e.
Striker
Corporation will be making an estimated tax payment of
$7,100
next month.

 

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