Answer:
Total Cash Payments are as follows:
For March = $91,834
For April = $119,960
For May = $107,726
Explanation:
Note: See the attached Excel file for the schedule of cash payments
The expenses paid in each month are estimated as follows:
a. March Expenses
Paid in March = (Total projected selling and administrative expenses for March - Depreciation, insurance, and property taxes for March) * Percentage of reminder paid = ($160,800 - $35,000) * 73% = $91,834
Paid in April = (Total projected selling and administrative expenses for March - Depreciation, insurance, and property taxes for March) * Percentage of balance paid = ($160,800 - $35,000) * (100% - 73%) = $33,966
b. April Expenses
Paid in April = (Total projected selling and administrative expenses for April - Depreciation, insurance, and property taxes for April) * Percentage of reminder paid = ($152,800 - $35,000) * 73% = $85,994
Paid in May = (Total projected selling and administrative expenses for April - Depreciation, insurance, and property taxes for April) * Percentage of balance paid = ($152,800 - $35,000) * (100% - 73%) = $31,806
c. May Expenses
Paid in May = (Total projected selling and administrative expenses for May - Depreciation, insurance, and property taxes for May) * Percentage of reminder paid = ($139,000 - $35,000) * 73% = $75,920
