1)

Mitchell Company had the following budgeted sales for the first half of next year:

	Cash Sales	Credit Sales
January	$50,000	$150,000
February	$55,000	$170,000
March	$48,000	$130,000
April	$53,000	$148,000
May	$63,000	$200,000
June	$80,000	$380,000

The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:

Collections on credit sales:

50% in month of sales

40% in month of following sales

10.0% in second month following sales

Assume that the accounts receivable balance on January 1 was $60,000. Of this amount, $42,000 represented uncollected December sales and $18,000 represented uncollected November sales. Given these data, the total cash collected during January would be:

$239,000 $84,000 $256,000 $176,600 (Which is the answer)

2) Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

	Beginning Inventory	Ending Inventory
Finished goods (units)	19,000	69,000
Raw material (grams)	49,000	39,000

Each unit of finished goods requires 3 grams of raw material.

If the company plans to sell 540,000 units during the year, how much of the raw material should the company purchase during the year?

1,760,000 grams 1,779,000 grams 1,809,000 grams 1,770,000 grams (Which is the answer)

3) Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

	Sales are budgeted at $310,000 for November, $320,000 for December, and $320,000 for January.
	Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible.
	The cost of goods sold is 70% of sales.
	The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
	Other monthly expenses to be paid in cash are $21,600.
	Monthly depreciation is $18,800.
	Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$42,000
Accounts receivable, net of allowance for uncollectible accounts	90,000
Merchandise inventory	151,900
Property, plant and equipment, net of $618,000 accumulated depreciation	1,240,000
Total assets	$1,523,900
Liabilities and Stockholders' Equity
Accounts payable	$174,150
Common stock	980,000
Retained earnings	369,750
Total liabilities and stockholders' equity	$1,523,900

December cash disbursements for merchandise purchases would be:

$156,800 $212,100 $224,000 $221,900 (Which is the answer)