1. A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August. Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month. During August, the following items were budgeted

Wages Expense	$150,000
Purchase of office equipment	72,000
Selling and Administrative Expenses	48,000
Depreciation Expense	36,000

The budgeted cash disbursements for August are

a. $732,000.

b. $696,000.

c. $648,000.

d. $426,000.

2. Astor Manufacturing has the following budgeted sales: January $120,000, February $180,000, and March $150,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during March are:

a. $157,500.

b. $150,000.

c. $168,000.

d. $159,000.

3. Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?

a. $135,000

b. $157,500

c. $202,500

d. $210,000

4. A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were:

January	$360,000
February	216,000
March	540,000

The cash inflow in the month of March is expected to be

a. $406,800.

b. $388,800.

c. $307,800.

d. $324,000.

5. On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale requires an ending cash balance of $40,000, the company must borrow

a. $32,000.

b. $48,000.

c. $92,000.

d. $40,000.