Use the information below to answer the following question(s).Grinnell Manufacturing Company has the following information for 2020:
Budget Expenses per Month
Note: All cash expenses are paid as incurred; Collections from sales are 50% in the month of sale and 50% in the month following the sale; December 2019 sales were $110,000.
-What is the expected total cash disbursements for expenses in February?

Question

Use the information below to answer the following question(s).Grinnell Manufacturing Company has the following information for 2020:
  Budget Expenses per Month
  Note: All cash expenses are paid as incurred; Collections from sales are 50% in the month of sale and 50% in the month following the sale; December 2019 sales were $110,000.
-What is the expected total cash disbursements for expenses in February?

Quizplus · Accepted Answer

The total cash disbursements for expenses in February can be calculated by taking the total budget expenses per month and subtracting the non-cash expenses (i.e. depreciation) and any expenses that will not be paid in February (i.e. prepaid expenses). Using this formula, the expected total cash disbursements for February would be:
Total Budget Expenses per Month - Depreciation - Prepaid Expenses
= $40,000 - $5,000 - $4,600
= $30,400
Therefore, the correct answer is D.

Use the Information Below to Answer the Following Question(s)