3. What are Total Cash Payments for Purchases of Inventory for August?

multiple choice 3

• $27,720

• $ 6,390

• $34,650

• $36,560

• $34,110

4. What is Total Commissions Expense Expense for July?

multiple choice 4

• $1,300

• $3,270

• $1,800

• $1,470

• $1,960

5. What is Total Insurance Expense for July?

multiple choice 5

• $ 500

• $ 0

• $1,500

• $1,000

• $12,000

6. What is the Total Cash Payment for Depreciation Expense for July?

multiple choice 6

• $22,000

• $22,900

• $ 900

• $ 1,800

• $ 0

8. What is Total Interest Expense for July?

multiple choice 8

• $2,100

• $7,000

• $ 0

• $ 700

• $1,400

9. What is Total Cash Surplus (Deficit) for July?

multiple choice 9

• $(7,100)

• $7,613

• $( 600)

• $ 600

• $ 5,400

10. What is Total Net Borrowing (Repayment) for August?

multiple choice 10

• $(7,613)

• $ 6,000

• $ (2,613)

• $ 2,613

• $ 0

11. What is the Contribution Margin for August?

multiple choice 11

• $60,000

• $57,600

• $24,600

• $20,090

• $14,730

12. What is the balance of Cash on August 31, 2020?

multiple choice 12

• $ 5,400

• $ 5,000

• $ 0

• $76,000

• $ 5,900

13. What is the balance of Accounts Receivable on August 31, 2020?

multiple choice 13

• $12,250

• $ 27,250

• $15,000

• $18,750

• $16,000

19. What is the balance of Commissions Payable on July 31, 2020?

multiple choice 19

• $1,800

• $ 0

• $3,270

• $1,470

• $1,300

The information given below is the Cavaliers Company's beginning balance sheet, estimates and policies, and the partially completed Master Budget for July and August. Use the information to answer the 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. Cavaliers Company Sales Budget S&A Expenses Budget Cavaliers Company Balance Sheer As of June 30, 2020 LIABILITIES & STOCKIIOLDERS' EQUITY Current Liabilities S 5,000 Accounts Payable $11.000 15,000 Commissions Payable 1,300 Income Taxes Payable 3,500 1,600 Dividends Payable 21,600 Total Current Liabilities 15,800 July August September July ASSETS Current Assets Cash Accounts Receivable Prepaid Insurance Inventory Total Current Assets August Variable Selling & Admin Expenses Sales Commissions Credit Sales $ 49,000 $ 60,000 $ 75,000 (4) Utilities Long-term debt 70,000 Cash Receipts: Total Variable S&A Expenses 1,960 2,400 From Current Month Sales Property Plant & Equipment Land Equipment Accumulated Depreciation Net PP & E 60,400 85,000 (22,000) 123,400 Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity From Prior Month Sales 49.200 10,000 59,200 Fixed Selling & Admin Expenses Utilities Total Cash Receipts (1) $ 57,250 Total Assets $ 145,000 Total Liabilities & SE S 145,000 Advertising 1,100 1,100 Salaries 1,400 1,400 Inventory Purchases Budget 900 900 1. Expected sales are $49,000, $60,000, and $75,000, respectively in July, August, and September. All sales are on credit. The company collects 75% of sales in the month of the sale and 25% in the month July August September Depreciation Insurance Total Fixed S&A Expenses (5) after the sale. 4,200 4,200 COGS $ 33,000 $ 41,250 Cash Payments for S&A Expenses Sales Commissions Desired Ending Inventory Total Inventory Needed Beginning Inventory Inventory Purchases Utilities 790 900 (2) $ 34,650 Advertising 1,100 1,100 2. The cost of goods sold is equal to 55% of sales. 3. The company desires an ending inventory equal to 20% of the next month's cost of goods sold. 4. All purchases of inventory are on credit. The company pays for 80% of its purchases in the month of the purchase and 20% in the month after the purchase. 5. The company pays a 3% sales commission to its sales staff that is paid in the month after it is earned. 6. The company also incurs a utilities expense that is equal to $300 plus 1% of sales. This expense is paid in the month it is incurred. 7. Other Selling and Administrative Expenses, paid in the month they are incurred, include Advertising $1,100 per month, Salaries $1,400 per month and Depreciation $900 per month. 8. On July 1 the company purchased an insurance policy covering 24 months for $12,000. 9. The company pays interest on its long-term debt at the end of each month. Interest is equal to 1% of the balance of long-term debt at the beginning of the month. Salaries 1,400 1,400 Cash Payments for Purchases (6) Depreciation Insurance For Current Month Purchases $ 25,560 (7) For Prior Month Purchases 11,000 Total Payments for S&A Expenses $ 16,590 $ 4,870 Total Cash Payments $ 36,560 Cash Budget Income Statement Balance Sheet July August July August July August July August $ 49,000 $ 60,000 Beginning Balance Sales ASSETS LIABILITIES & STOCKHOLDERS EQUITY Current Liabilities Cash Receipts 57,250 Less: Variable Costs Current Assets Total Cash Available 56,750 COGS Cash Accounts Payable $ 6,390 (18) Variable S&A Expenses Contribution Margin (12) (13) Accounts Receivable 12,250 (19) (11) Commissions Payable Income Taxes Payable Prepaid Insurance (14) Cash Payments: For Inventory Purchases For S&A Expenses 36,560 Less: Fixed Costs Inventory (15) Dividends Payable (20) Fixed S&A Expenses Interest Expense Total Current Assets Total Current Liabilities For Interest (8) For Stock Investment Pre-tax Income $ 15,190 $ 19,640 Property Plant & Equipment Long term debt (21) For Land Less: Income Taxes 3,798 4,910 Stock Investment For Dividends Net Income $ 11,393 $ 14,730 Land (16) Stockholders' Equity For Taxes 85,000 85,000 Common Stock 49,200 49,200 Total cash payments 57,350 Equipment Accumulated Depreciation (17) (22) Retained Earnings Total Stockholders Equity Total PP &E (9) 7,613 Surplus/(Deficit) New Borrowing / (Repayment) Ending Cash Balance 6,000 (10) $ 5,000 TOTAL ASSETS $ 158,250 $ 167,350 TOTAL LIABILITIES & STOCKHOLDERS EQUITY $ 158,250 $ 167,350