Dobson Company expects to begin operating on January 1. The company's master budget contained the following operating expense budget: 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 cash to be paid for operating expenses during the month of January is:

Question

Dobson Company expects to begin operating on January 1. The company's master budget contained the following operating expense budget:  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 cash to be paid for operating expenses during the month of January is:

Quizplus · Accepted Answer

Cash payments for operating expenses = Salary expense + Sales commissions + Utilities + Rent + Miscellaneous
Cash payments for operating expenses = $40,000 + $0 + $2,800 + $7,200 + $1,800 = $51,800

Dobson Company Expects to Begin Operating on January 1