Barnes Company Expects to Begin Operating on January 1 Sales Commissions Are Paid in Cash in the Month Following

question 50

Multiple Choice

Barnes Company expects to begin operating on January 1. The company's master budget contained the following operating expense budget: $$\begin{array} { | l | r | r | r | } \hline & { \text { January } } & \text { February } &{ \text { March } } \\\hline \text { Salary expense } & \$ 36,000 & \$ 36,000 & \$ 36,000 \\\hline \text { Sales commissions, } 5 \% \text { of sales } & 30,000 & 32,000 & 24,000 \\\hline \text { Utilities } & 2,800 & 2,800 & 2,800 \\\hline \text { Depreciation on store equipment } & 1,000 & 1,000 & 1,000 \\\hline \text { Rent } & 7,200 & 7,200 & 7,200 \\\hline \text { Miscellane ous } & 1,800 & 1,800 & 1,800 \\\hline \text { Total operating expenses } & \$ 78,800 & \$ \quad 80,800 & \$ 72,800 \\\hline\end{array}$$ 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 accumulated depreciation appearing on the company's March 31 pro forma balance sheet is:

• A) $1,000.
• B) $2,000.
• C) $3,000.
• D) $12,000.

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Definitions:

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The process by which infants develop automatic responses to certain stimuli, such as sucking or grasping, as part of their neurological growth.

Mental

Pertaining to processes of the mind, including cognitive, emotional, and psychological aspects of health and functioning.

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Refers to a machine that converts electrical energy into mechanical energy or motion.

Behavioral Development

The process by which individuals change or acquire new behaviors and skills across their lifespan.