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

question 93

Multiple Choice

Dobson Company expects to begin operating on January 1. The company's master budget contained the following operating expense budget: $\begin{array}{|l|r|r|r|}\hline&\text { January } & \text { February } & \text { March } \\\hline\text { Salary expense }&\$ 40,000 & \$ 36,000 & \$ 36,000 \\\hline \text { Sales commissions, } 5 \% \text { of sales } & 24,000 & 30,000 & 28,000 \\\hline \text { Utilities } & 2,800 & 2,800 & 2,800 \\\hline \text { Depreciation on store equipment } & 1,800 & 1,800 & 1,800 \\\hline \text { Rent } & 7,200 & 7,200 & 7,200 \\\hline \text { Miscellaneous } & 1,800 & 1,800 & 1,800\\\hline\text {Total operating expenses}&\$ 77,600 & \$ 79,600 & \$ 77,600\\\hline\end{array}$ 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 cash to be paid for operating expenses during the month of January is:

• A) $53,600.
• B) $51,800.
• C) $77,600.
• D) None of these.

---

Definitions:

Apollo Of Veii

An ancient Etruscan terracotta statue representing Apollo, discovered at the sanctuary of Portonaccio near Veii.

Temple Pediment

denotes the triangular upper part of the front of a building in classical style, typically surmounting a portico of columns, and often decorated with sculpture.

Tomb Of Reliefs

An ancient burial site notable for its detailed reliefs carved into its walls, depicting everyday life and offering insights into the customs and culture of the people interred within.

Cerveteri

An ancient city in Italy, known for its Etruscan necropolis with elaborate tombs, reflecting the social and cultural life of the Etruscans.