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Posted on Sep 02, 2024

7. Grason Corporation is preparing a budgeted balance sheet for 2018. The retained earnings balance at December 31, 2017 was $533,500. The 2018 budgeted income

7. Grason Corporation is preparing a budgeted balance sheet for 2018. The retained earnings balance at December 31, 2017 was $533,500. The 2018 budgeted income statement shows expected net income of $112,000. The company expects to declare dividends during 2018 amounting to $40,000. The expected balance in retained earnings on the 2018 budgeted balance sheet is:

$533,500.
$605,500.
$645,500.
$493,500.
$685,500.

8. Ballentine Company expects sales for June, July, and August of $48,000, $54,000, and $44,000, respectively. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 50% of its credit sales in the month following sale, 45% in the second month following sale, and 5% are not collected. What are the company's expected cash receipts for August from its current and past sales?

$29,160.
$46,760.
$61,160.
$66,200.
$78,800.

9. Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash payments during August. Southland Company wants to maintain a minimum cash balance of $10,000. The preliminary cash balance at the end of August before any loan activity is:

$13,300.
$137,800.
($13,700).
$3,300.
$27,000.

10. If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

$860
$1,100
$1,960
$9,160
$11,360

11. Zhang Industries budgets production of 300 units in June and 310 units in July. Each unit requires 1.5 hours of direct labor. The direct labor rate is $14 per hour. The indirect labor rate is $21 per hour. Compute the budgeted direct labor cost for July.

$6,300.
$6,510.
$9,450.
$9,765.
$16,275.

12. Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 5% of the next month's sales. It estimates that May's ending inventory will consist of 14,000 units. June and July sales are estimated to be 280,000 and 290,000 units, respectively. Compute the number of units to be produced in June.

290,000.
294,500.
280,500.
280,000.
266,000.

13. Masterson Company's budgeted production calls for 56,000 units in April and 52,000 units in May of a key raw material that costs $1.85 per unit. Each month's ending raw materials inventory should equal 30% of the following month's budgeted materials. The April 1 inventory for this material is 16,800 units. What is the budgeted materials purchases for April?

$106,560.
$101,380.
$103,600.
$72,520.
$132,460.

14. Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct labor requirement per unit is 0.50 hours. Labor is paid at the rate of $21 per hour. The total cost of direct labor budgeted for the month of August is:

$82,950.
$4,050.
$85,050.
$3,950.
$168,000.

15. Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:

January February. March Material purchases

$12,040 $14,150 $10,970

Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The expected January 31 Accounts Payable balance is:

$6,500.
$7,075.
$12,040.
$6,020.
$9,270.

16. Junior Snacks reports the following information from its sales budget:

Expected sales:	October	$	143,000
	November		151,000
	December		187,000

All sales are on credit and are expected to be collected 40% in the month of sale and 60% in the month following sale. The total amount of cash expected to be received from customers in November is:

$146,200.
$85,800.
$151,000.
$236,800.
$60,400.

17. Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,400. Cash receipts are expected to be $641,000 and cash payments for purchases are expected to be $608,500. Other cash expenses expected are $27,000 selling and $33,500 general and administrative. The company desires a minimum cash balance at the end of each month of $30,000. If necessary, the company borrows enough cash to meet the minimum using a short-term note. The amount Webster must borrow during April is:

$0.
$21,600.
$8,400.
$98,900.
$58,000.

18.A merchandiser, provides the following information for its December budgeting process: The November 30 inventory was 1,800 units. Budgeted sales for December are 4,000 units. Desired December 31 inventory is 2,840 units. Budgeted purchases are:

5,040 units.
1,240 units.
6,840 units.
4,000 units.
5,800 units.

19. Boulware Companys budgeted production calls for 5,000 units in October and 8,000 units in November. Each unit requires 8 pounds (lbs.) of raw material A. Each months ending inventory of raw materials should equal 20% of the following months budgeted materials requirements. The October 1 inventory for this material is 8,000 pounds. What is the budgeted materials purchases in pounds for October?

40,000 lbs.
44,800 lbs.
52,800 lbs.
60,800 lbs.
35,200 lbs.

20. In a company that employs continuous budgeting on a quarterly basis and has an accounting period that ends December 31 of each year, what period would the first revision and update to the January through December 2017 budget cover?