Preparing a schedule of cash payments for selling and administrative expenses The budget director for Vase Window Cleaning Services prepared the following list of expected operating expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations;

accordingly, there are no beginning account balances.

L.O. 4 L.O. 5 October November December Budgeted Operating Expenses Equipment lease expense $ 7,000 $ 7,000 $ 7,000 Salary expense 6,400 6,800 6,900 Cleaning supplies 2,600 2,860 3,146 Insurance expense 1,000 1,000 1,000 Depreciation on computer 1,600 1,600 1,600 Rent 1,800 1,800 1,800 Miscellaneous expenses 600 600 600 Total operating expenses $21,000 $21,660 $22,046 Schedule of Cash Payments for Operating Expenses Equipment lease expense ? ? ?

Prior month’s salary expense, 100% ? ? ?

Cleaning supplies ? ? ?

Insurance premium ? ? ?

Depreciation on computer ? ? ?

Rent ? ? ?

Miscellaneous expenses ? ? ?

Total disbursements for operating expenses $18,000 $18,660 $19,346 Required

a. Complete the schedule of cash payments for operating expenses by filling in the missing amounts.

b. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.

c. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.