2006 ACCOUNTS PAYABLE INFORMATION
This account represents the purchases for raw materials only . It is expected that purchases will be made evenly throughout the year , and that all purchases will be paid for during the month following the purchase .
2006 WAGE AND SALARY INFORMATION
The accrued wage account will include all direct labor , indirect labor , sales commissions and salaries , and administrative salaries . All wages are earned evenly throughout the year , and employees are paid twice each month . On December 31 , 2006 , the accrued wages will include wages representing one full payroll period .
2006 ACCRUED OTHER INFORMATION
This account includes all other cash expenses not included in Account Payable and Accrued Wages . It is the company ' s policy to pay all other expenses during the month following the purchase . These expenses will be incurred evenly throughout the year . The 20 % fringe benefits will be paid on all wages , salaries , and commissions .
2006 PROPERTY , PLANT AND EQUIPMENT INFORMATION
Property , plant and equipment consist of the following on December 31 , 2005 :
Property and plant $ 750,000 Equipment 1,025,000
Total Property , Plant and Equipment $ 1,775,000
Each additional machine that is needed to support the production level expected during 2006 will cost $ 30,000 and be depreciated over five years using the straight-line method . Assume that any equipment