125. 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. $307,800. c. $324,000. d. $388,800. Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 126. Which one of the following items would never appear on a cash budget? a. Office salaries expense b. Interest expense c. Depreciation expense d. Travel expense Ans: C, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 127. Correy, Inc. reported the following information for 2016: October November December Budgeted sales $460,000 $440,000 $540,000 Budgeted purchases $240,000 $256,000 $288,000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month Cost of goods sold is 35% of sales. Codex purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much cash will Correy receive during November? a. $220,000 b. $490,000 c. $450,000 d. $440,000 Ans: C, LO4, Bloom: AP, Difficulty: Hard, Min: 7, AACSB: None, AICPA BB: Industry Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 128. Correy Company reported the following information for 2016: October November December Budgeted sales $460,000 $440,000 $540,000 Budgeted purchases $240,000 $256,000 $288,000 Cost of goods sold is 35% of sales. Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much is the budgeted balance for Accounts Payable at October 31, 2016? a. $96,000 b. $144,000 C. $204,000 d. $102,400 Ans: A. LO:4, Bloom: AP. Difficulty Hard, Min: 5. AACSB: None, AICPA BB: Industry Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving. IMA: Budget Preparation 129. Petal Co. reported the following information for 2016: October November December Budgeted sales $930,000 $870,000 $1,080,000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much is the November 30, 2016 budgeted Accounts Receivable? a. $900,000 b. $540,000 C. $465,000 d. $435,000 Ans: D, LO: 4, Bloom: AP, Dilloul Medium, Min: 3, AACSB: None, AICPA BB: Industry Sector Perspective, AICPA FN: Measurement, ACPA PC: Problem Solving, IMA: Budget Preparation 130. Bean Manufacturing reported the following information for 2016: October November December Budgeted purchases $240,000 $256,000 $288,000 Operating expenses are: Salaries, $100,000; Depreciation, $40,000; Rent, $20,000; Utilities, $28,000 Operating expenses are paid during the month incurred. Accounts payable is used only for inventory acquisitions. How much is the budgeted amount of cash to be paid for operating expenses in November? a. $404,000 b. $148,000 C. $188,000 d. $444,000 131. During September, the capital expenditure budget indicates a $420,000 purchase of equipment. The ending September cash balance from operations is budgeted to be $60,000. The company wants to maintain a minimum cash balance of $30,000. What is the minimum cash loan that must be planned to be borrowed from the bank during September? a. $330,000 b. $360,000 C. $450,000 d. $390,000 Ans: d. LO: 4, Bloom: AP. Difficulty: Medium, Min: 5. AACSB: None, AICPA BB: Industry Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 132. Young Co. has budgeted its activity for December according to the following information: 1. Sales at $600,000, all for cash. 2. Budgeted depreciation for December is $15,000. 4. The cash balance at December 1 was $15,000. 5. Selling and administrative expenses are budgeted at $60,000 for December and are paid for in cash. 6. The planned merchandise inventory on December 31 and December 1 is $18,000. 7. The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid in cash. How much are the budgeted cash disbursements for December? a. $345,000 b. $510,000 c. $525,000 d. $492,000 Ans: B, LO. 4, Bloom: AP. Difficulty: Hard, Min: 5, AACSB: Analytic, AICPA BB: Resource Management, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 133. Dex, Industries expects to purchase $120,000 of materials in March and $140,000 of materials in April. 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. In addition, a 2% discount is received for payments made in the month of purchase. How much will April's cash disbursements for materials purchases be? a. $88,200 b. $108,200 c. $132,900 d. $120,000 A C, LO, Bloom: AP, Difficulty: Hard, Min: 6, AACSB Analy, AICPA BB: Resource Management, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 134. On January 1, Witt Company has a beginning cash balance of $126,000. During the year. the company expects cash disbursements of $1,020,000 and cash receipts of $870,000. If Witt requires an ending cash balance of $120,000, Witt Company must borrow a. $96,000. b. $120,000 c. $144,000. d. $276,000. comme COBA 135. Mapleviews, Inc. has the following budgeted sales: July $200,000, August $300,000, and September $250,000. 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 September are a. $280,000 b. $265,000. C. $262,500. d. $250,000 Ans: B. LO: 4, Bloom: AP, Difficulty: Hard, Min: 6, AACSB: Analytic, AICPA BB: Resource Management, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 136. Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are a. $528,000. b. $512,000. C. $480,000 d. $416,000. 152. Grey Company has 24,000 units in beginning finished goods. If sales are expected to be 120,000 units for the year and Grey desires ending finished goods of 30,000 units, how many units must the company produce? a. 114,000 b. 120,000 C. 126,000 d. 150,000 S e paracion TO, RUPAN Measurement, AICPA PC: Problem 154. 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. $40,000. C. $48,000. d. $92,000. Ans: C, LO: 4, Bloom: AP. Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Resource Management, AICPA FNE Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 155. The budget that is often considered to be the most important financial budget is the a. cash budget. b. capital expenditure budget. C. budgeted income statement. d. budgeted balance sheet. Ans: A, LO: 4, Bloom: K. Difficulty: Easy, Min: 1. AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget Preparation 156. Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250,000, February $300,000 and March $350,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are a. $330,000. b. $320,000. C. $300,000. d. $260,000