1.ABC Company has sales of $600,000 in January. Past experience suggests that 40% of sales is cash sale. Of its credit sales, 55% is paid in the month following the sale, and 40% is paid in the second month following the sale. The rest is bad debt. The amount of cash collection from January sales in February is:

a.$330,000

b.$198,000

c.$144,000

d.$132,000

2. Cash budget is NOT based on:

a. Varialble Overheads budget

b. Production budget

c. Capital Expenditure budget

d. Sales budget

Company has sales of $700,000 in January. Normally, 60% of sales is collected within the month of sales. Of its remaining uncollected sales, 53% is paid in the month following the sale, and 44% is paid in the second month following the sale. The rest is bad debt. The amount of bad debt from January sales is:

a.$12,600

b.$8,400

c. Cannot be determined

d.$21,000

5. Which of the following is not needed in preparing a production budget?

a. Opening balance of inventory

b. Closing balance of inventory

c. Sales

d. Production cost per unit

Industries expects credit sales for January, February, and March to be $200,000, $260,000, and $300,000, respectively. It is expected that 55% of the sales will be collected in the month of sale, 35% will be collected in the following month, and 10% will be collected in the second month after the sales. Closing balance of Accounts Receivable at the end of March is expected to be:

a.$161,000

b.$155,000

c.$121,000

d.$135,000