Question - Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:
April May June
Manufacturing costs (1) $157,100 $196,400 $213,800
Insurance expense (2) 810 810 810
Depreciation expense 1,920 1,920 1,920
Property tax expense (3) 520 520 520
(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.
(2) Insurance expense is $810 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
(3) Property tax is paid once a year in November.
The cash payments expected for Finch Company in the month of April are
a. $120,255
b. $157,100
c. $138,678
d. $117,825